He Colombian peso falls in front of the US dollar for the third consecutive dayreaching minimum not seen since February 3.
He USD/COP It quotes up establishing a daily minimum at 4,152.24, toLaning a maximum of a month and a half in 4,198.73.
At the time of writing the USD/COP, 0.69% daily, operating about 4,181,63.
The Colombian peso loses traction economic data from the US and a cautious posture of the Fed
- The United States Department of the United States announced today the weekly applications for unemployment subsidy, located in 223,000 in the week that ended on March 15, slightly lower than 224,000 estimated by analysts, exceeding the 220,000 observed in the previous week.
- On the other hand, the manufacturing index of the Fed of Philadelphia rose to 12.5 points in March, above the 8.5 scheduled, although located below the 18.1 registered in February.
- The Federal Reserve kept the interest rate in a range between 4.25% and 4.50%citing inflationary risks in the short term related to tariff uncertainty. The points chart showed an estimated projection of two cuts in the year, subject to the evolution of economic data.
US interest rates
Financial institutions charge interest rates on loans to borrowers and pay them as interest to savers and depositors. They influence the basic types of interest, which are set by central banks based on the evolution of the economy. Normally, central banks have the mandate to guarantee the stability of prices, which in most cases means setting as an objective an underlying inflation rate around 2%.
If inflation falls below the objective, the Central Bank can cut the basic types of interest, in order to stimulate credit and boost the economy. If inflation increases substantially above 2%, the Central Bank usually rises the interest rates of basic loans to try to reduce inflation.
In general, higher interest rates contribute to reinforce the currency of a country, since they make it a more attractive place for world investors to park their money.
The highest interest rates influence the price of gold because they increase the opportunity cost of maintaining gold instead of investing in an asset that accrues interest or depositing effective in the bank.
If interest rates are high, the price of the US dollar (USD) usually rises and, as gold quotes in dollars, the price of low gold.
The federal funds rate is the type to a day that US banks lend each other. It is the official interest rate that the Federal Reserve usually sets at its FOMC meetings. It is set at a fork, for example 4.75%-5.00%, although the upper limit (in this case 5.00%) is the aforementioned figure.
Market expectations on the interest rate of the Federal Reserve funds are followed by the Fedwatch of the CME tool, which determines the behavior of many financial markets in the forecast of future monetary policy decisions of the Federal Reserve.
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.
