Dollar rises after United States employment data

The dollar started the last day of the week below $930, but the outlook changed after the release of employment data in the United States. Higher-than-market job creation in the superpower dampened expectations that the Federal Reserve would cut interest rates in March, a scenario that pushed the dollar across the world and the local exchange market was no exception.

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,There was considerable upward pressure during the day (…) These data (employment in the United States) led to the appreciation of the dollar globally. Which creates upward pressure on the local exchange rate. In addition to adding the third day, where copper is weakening, which also generates an appreciation of the exchange rate,” commented José Tomás Riveros, head of international sales at Capiteria.

At the end of the day, On the Chilean Electronic Stock Exchange (BEC), the dollar rose by $18.75 from yesterday’s close and reached a price of $947.75 per unit. This is its highest value since mid-October last year. The dollar gained $25.75 during the week.

However, at noon, The currency reached a maximum of $950.45. Whereas, when it recorded losses, the lowest level of the dollar was $928.21.

Whereas, Chilean peso gave land corresponding to one Its main base is copper. Metal prices fell on Friday on concerns about demand from China, volatile global industrial activity and expectations that US interest rates will remain high for longer. Apart from this, the strength of the dollar has also put pressure on copper.

Another factor was that China, the main exporter of metals, is approaching the Chinese New Year holidays from February 9 to 16, which is typically a period of low demand and lean operations.

Thus, The three-month price of copper on Comex, the main futures exchange, fell 0.77% to US$3.82 per pound. Meanwhile, spot copper fell 0.44% to US$3.81 per pound on the London Metal Exchange.

For its part, the world dollar reversed its decline, which put it on track for its first weekly loss of the year. The currency changed its trajectory after the Fed lowered interest rates in March. A scenario that is supported by job creation and stronger-than-expected wage growth and that prompts the Fed to keep rates at the current level for a longer period of time.

Financial markets have cut their expectations for a rate cut in March and now expect the central bank to start lowering borrowing costs in May. According to CME Group’s FedWatch tool. Starting March 2022, the Federal Reserve has raised its interest rates by 525 basis points, bringing them to the current range of 5.25% to 5.50%.

In this context, the dollar index – which measures the currency’s performance against a basket of the world’s most important currencies – rose 0.89% to 103.96 points.

At the regional level, all currencies fell and the Colombian peso stood out. The coffee-growing country’s currency raised its fiscal deficit target for 2024 to 5.3% of GDP from the previous target of 4.5% of GDP, to the extent allowed by fiscal rules, to seek countercyclical spending . To fix the economy.