Price of the dollar in Chile today May 8: The Chilean peso bounces from a minimum of a week

  • The US dollar falls to the Chilean peso, currently operating in 945.36.
  • The dollar (DXY) index has a 0.20%gain, reaching May 2 at 100.21.
  • The price of copper falls 0.53% on Wednesday, reaching minimal not seen since April 30 at $ 4814 per pound.
  • The Chilean consumer price index increased by 0.2% in April, improving market expectations.
  • Weekly requests for unemployment subsidy in the US decreased to 228,000 in the week that ended on May 3.

The USD/CLP reacted down from May 1 to 950.41, attracting vendors that dragged parity to a minimum of the day in 942.54. At the time of writing, the USD/CLP goes back 0.14% quoting 945.36.

Chilean weight gains ground after registering a decrease in inflation

Based on information provided by the National Statistics Institute of Chile (INE), the consumer price index registered an increase of 0.2% in April, below the expected 0.3% and 0.5% observed in March.

The price of copper loses 0.53% in the day, operating when writing about $ 4,8814 per pound, signing its second consecutive day down.

On the other hand, the weekly applications for the United States unemployment subsidy fell to 228,000 in the week that ended on May 3. This figure is below 230,000 estimated and 241,000 reached in the previous week.

After this news, the dollar index (DXY) rebounds 0.20% on Thursday, reaching May 2 in 100.21, spinning 2 consecutive sessions with profits.

The Chilean weight quotes with profits, while the USD/CLP falls 0.12%, consolidating within the operating range of May 7 in 945.36.

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 next key resistance is at 1,007.73, maximum of April 9. In South, the important support is observed at 915.57, 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

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