The Colombian peso falls against the US dollarsigning its third consecutive day down.
He USD/COP It marked a daily minimum at 4,198.83, attracting buyers who carried the maximum parity of a week at 4,268.41.
At this time, The USD/COP wins 0.66% on the last day of the week, traded at 4,260.95.
The Colombian weight loses traction after economic data from the United States
- The non -agricultural payrolls of the United States registered an increase in 177,000 in April, according to information presented by the Office of Labor Statistics. This result is after 185,000 observed in March and is located above the 130,000 estimated by analysts.
- On the other hand, the US unemployment rate was 4.2% in the same period, matching the previous and planned figure.
- The dollar index (DXY) goes back 0.41%, consolidating within Thursday’s operational range at 99.80.
- After this news, the Colombian peso slides to a minimum of a week, while the USD/COP rebounds to maximums not seen since April 25 in 4,268.41.
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.
