- The US dollar falls to the Chilean peso, currently operating in 939.42.
- The dollar index (DXY) goes back 0.34% daily, currently quoting 99.46.
- The price of copper extends its profits and rebounds 1.57% on Tuesday, signing its fourth consecutive day up.
- China’s Caixin Services PMI is 50.7 points in April, worsening analysts’ estimates.
- The attention of the operators will be in the Federal Reserve interest decision on Wednesday, it is expected to remain unchanged by 4.5%.
The USD/CLP established a maximum of the day in 943.66, attracting vendors that dragged the parity to a minimum of April 28 at 938.05. Currently, the USD/COP presents a marginal loss of 0.06%, quoting at 939.28.
Chilean weight lies upwards for the fourth consecutive day
Based on information provided by Markit Economics, the Caixin PMI of Services of China stood at 50.7 points in April, below the 51.7 planned and the 51.9 observed in March. This result reflects a slight contraction in China’s economic activity, which is the first copper importer in the world.
In this sense, copper prices rebound 1.78% today, consolidating at maximum April 30 in $ 4,7258 per pound, signing its fourth consecutive day upwards.
On the other hand, the dollar index (DXY) falls 0.34% on Tuesday, reaching April 30 at 99.25, spinning three consecutive sessions with losses.
In this context, the Chilean weight lies upwards, while the USD/CLP goes back 0.06% daily, reaching minimum of April 28 in 936.33.
The focus of the operators will be on Wednesday about the decision of interest rates by the Federal Reserve. It is expected to remain unchanged in a range between 4.25% and 4.50%.
Technical levels in the USD/CLP
The USD/CLP formed a short -term resistance given by the maximum of April 30 in 961.65. The following important resistance is at 1,007.73, maximum of April 9. Down, the key support is located at 915.57, a pivot point of March 19.
USD/CLP daily graphics
US dollar FAQS
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
