- The US dollar falls against Chilean peso, currently quoting in 926.44.
- The dollar index (DXY) advances 0.14% today, reaching maximum of June 30 at 96.62.
- Copper prices rebound a 2.23% daily, visiting maximums not seen since March 27.
- The US ADP Employment Report announced the loss of 33,000 positions in June, worsening market estimates.
The USD/CLP established a maximum of the day in 932.51, where it attracted aggressive vendors that dragged the parity to minimum of March 27 in 922.51. At the moment, the USD/CLP decoced 0.25% daily, operating over 926.44.
Chilean weight quotes with profits after US employment data
According to Automatic Data Processing (ADP), the hiring of the US private sector reported a cut of 33,000 positions, disappointing the creation of 95,000 jobs planned by analysts and the 29,000 observed in the previous period ..
Despite this result, the dollar index (DXY) earns 0.14% on Wednesday, reaching maximum of two sessions in 97.15, ending with a streak of seven consecutive days down.
On the other hand, copper prices rise 2.23% in the day, visiting maximum of March 27 in $ 5,1344 per pound.
In this context, the Chilean weight gains ground for the second consecutive day, while the USD/CLP loses 0.25% in the day, reaching minimum of March 27 in 922.51.
Technical levels in the USD/CLP
The USD/CLP formed a short -term resistance given by the maximum of June 23 in 953.62. Down, the immediate support is observed at 915.57, pivot point of March 19.
USD/CLP daily graphics
US Dollar – Frequently Questions
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.
