He Colombian peso has reached on Wednesday its fourth maximum consecutive daily of the last eight weeks against the US dollar, although after reaching it it has bounced slightly down, registering losses in the day.
He USD/Cop has fallen today to a new minimum since April 3 at 4,111.00, although it has later risen slightly to 4,125.17.
The price of the dollar against Colombian peso currently listed about 4,119.29, earning 0.13% daily.
The Fed minutes will mark the next FOMC movement
- He US dollar index (DXY) has gr convenient this Wednesday after the good data published yesterday in the United States. The conference of the Conference Board unexpectedly improved in May while the requests for lasting goods in April fell less than expected.
- Besides, The improvement in the negotiation perspectives between the US and the European Union, has also improved the feeling of the marketslightly promoting the dollar. Donald Trump announced that he postponed 50% tariffs on products from EU to July 9, and then said the block had proposed to hurry the negotiations.
- The United States Federal Reserve will publish in the American afternoon the minutes of its last monetary policy meeting, giving clues about its inflation prospects and the possibility of rates cuts in the remainder of the year. The statement can generate volatility in the USD/COP.
- In Colombia, today is national unemployment day. The unions have convened a 48 -hour strike, demonstrating throughout the country to support the popular consultation promoted by Gustavo Petro’s government to promote social reforms. The president of the National Federation of Merchants (Fenalco), contrary to mobilization, called the act as harmful to the economy, ensuring that it will cause losses above 278,000 million dollars per day.
- Colombia will publish on Friday its April unemployment data. In March, the unemployment rate fell to 9.6%, its lowest percentage in three months.
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.
