- The US dollar operates without significant changes against Chilean peso, currently quoting at 945.50.
- The dollar index (DXY) goes back 0.12%, consolidating within the operational range of the previous session at 98.72.
- Weekly requests for unemployment subsidy are located in 245,000, in line with market estimates.
- The Central Bank of Chile will keep its reference rate by 5%, complying with market expectations.
- The attention of investors will be in the decision of interest rates by the Fed.
The USD/CLP marked a maximum of 945.52, attracting vendors what dragged parity to a daily minimum in 942.38. At the time of writing, the USD/CLP earns 0.01% on Wednesday, operating over 945.50.
The Chilean weight can be seen prior to the Federal Reserve’s decision decision
According to information provided by the United States Department of Labor, when the weekly applications for unemployment subsidy fell to 245,000 in the week that ended on June 14, in line with the estimates of the analysts and located below the 250,000 observed in the previous week.
After this result, the dollar index (DXY) slides 0.12% daily, oscillating within the June 17 session range at 98.72.
On the other hand, the Central Bank of Chile kept the interest rate in 5%, in line with the expectations of analysts. The monetary authority does not make modifications since the last meeting of 2024, when it decided to decrease by 25 basic points to 5% current.
The focus of investors will be in the Federal Reserve interest decision, as well as in the economic projections of the FOMC, to be released today. The market consensus expects rates to remain unchanged by 4.50%, following the statements of the president of the FED, Jerome Powell.
In this context, the Chilean weight remains stable, while the USD/CLP rises 0.01% daily, quoting within the June 17 range in 945.50.
Technical levels in the USD/CLP
The USD/CLP reacted upwards from a short -term support given by the minimum of June 5 in 927.27. The following key support is observed at 915.57, Pivote Point of March 19. To the north, the key resistance is located at 1,007.73, maximum of April 9.
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.
