Dollar looks to resume upward trend

The dollar in Chile closed the day with gains, ending its downward trend. Before the decline, the United States currency had seen a profit trend and the currency rose again after reaching the highest level in more than a year.

Additionally, the national currency ignored the dollar’s losses globally after US retail sales came in weaker than expected in January.

do not miss in pulse

At the end of the day, The dollar on the Chilean Electronic Stock Exchange (BEC) rose by $6.1 compared to yesterday’s close and reached a value of $967.60., Thus, the currency ended two consecutive days of decline, where it lost $13.45.

However, in the first trading of the day, the currency tried to maintain its falling trend. The currency made a low of $955.50 and then pared its decline until registering profits. Whereas, on the upside, the currency marked a maximum of $969.45.

“Today the minutes of the last monetary policy meeting of the Central Bank of Chile were published, where it is clearly implied that the issuing entity will remain aggressive in terms of future rate cuts, thereby increasing the exchange rate”, commented from Rent gone4.

However, from Renta4, you also see that, “We are in a period of adjustment of expectations, with the dollar rising to around $970 and this new scenario in which the Fed (Federal Reserve) may make its first rate cut by June. Will suspend the monetary policy rate, forcing the Central Bank of Chile to be more conservative and reduce the MPR by only 50 or 75 bp at the next meeting.

Despite the fact that one of the main supports of the national currency, copper, has recovered, the Chilean peso has also lost strength., The metals were supported by a decline in the dollar index, which had hit a three-month high this week. The weaker US currency makes metals traded in greenbacks less expensive for holders of other currencies.

ThusThe three-month price of copper rose 1.57% to US$3.76 per pound On the main futures exchange, COMEX. Meanwhile, spot copper rose 0.24% to US$3.69 per pound on the London Metal Exchange.

“Investors are cautious over fears of a real estate crisis that China is going through, as the Asian real estate sector is one of the largest demanders of the red metal. The market is waiting to receive news about new stimuli that want to reactivate the sector,” said Sebastian Castellanos, XTB Latam market strategist.

Whereas, The dollar fell in the world The US economy remains in strong shape, for the second straight session on Thursday, after a series of mixed data showed the US economy remains in strong shape, which is unlikely to prevent the Federal Reserve from starting to cut interest rates before June.

The dollar index, which measures the currency’s performance against a basket of six peers, fell 0.43% to 104.27 points.

In the United States, excluding inflation, retail sales fell 0.8% in January, well below the 0.1% estimated in a Reuters poll., The data may have been affected by winter storms.

“Bad weather typically causes short-term declines in high-frequency economic indicators such as retail sales and housing construction, which are also likely to be weak when January data is released tomorrow,” said Bill Adams, chief economist at Comerica Bank.

However, Thierry Albert Weizmann, global rates and currencies strategist at Macquarie in New York, said The dollar’s decline was probably temporary.

“As long as this gap between US and global performance continues, there is no reason for a near-term change in the dollar’s momentum,” he said.