The dollar continues to move away from $970

The dollar continued its downward trend after the currency fell on Monday after two consecutive days of gains. Moreover, in the context of the United States market, the dollar in Chile is losing its grip and moving away from its highest level in more than a year, the previous day was a holiday in the superpower.

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At the end of the day, The dollar fell by $3.95 compared to Monday’s close on the Chilean Electronic Stock Exchange (BEC) and reached a value of $962.90. Unit. Thus, the currency recorded two consecutive days of decline, where it fell by $10.1.

However, during afternoon trading, the dollar hit a low of $960.60 and then pared its decline. Whereas, at the end of the day, the currency remained almost stable compared to the previous close, hitting a high of $966.40.

“Given the signs of cooling seen across the conference board, this weakness is largely justified. Additionally, we have seen how the Chinese economy has initiated a stimulus process in the housing sector,” he commented. Gonzalo Munoz, XTB Latam Market Strategist

Whereas, Ricardo Bustamante, Deputy Manager of Capitaria Studies, warns that, “The rate differential between Chile and the United States should continue to decrease, which will support the rise in the price of the greenback in our country. In any case, the Fed minutes and some economic data coming out in the coming days could create volatility in the exchange rate.

Besides, Chile’s peso and most Latin American currencies rose ahead of the release of the minutes of the last Federal Reserve meeting.When investors are optimistic about the next interest rate actions of the US central bank.

According to a slight majority of economists surveyed by Reuters, SThe US Federal Reserve is expected to cut the federal funds rate in JuneThat said, the biggest risk was that the first rate cut would be later than expected.

Meanwhile, the Chilean peso strengthened in line with a rise in copper futures, one of its main supports. Reuters reported that copper prices rose on Tuesday after China cut mortgage rates, but gains were limited as investors expected more support for the economy of the world’s top metals consumer.

Like this, andThe three-month price of copper on the main futures exchange Comex rose 0.70% to US$3.87 a pound. Meanwhile, spot copper rose 0.02% to US$3.79 per pound on the London Metal Exchange.

China announced the biggest-ever cut to its benchmark mortgage rate on Tuesday, cutting the key five-year lending rate by 25 basis points, the biggest cut since the benchmark rate was introduced in 2019 and analysts said. Much more than expected.

“The thinking is that if China steps on the accelerator, global growth will accelerate. “Then you’ll start to see selling of dollars and pennies in emerging markets,” said Adam Button, chief currency analyst at ForexLive in Toronto.

“Cutting mortgage rates more than expected is obviously positive, but people expect more action from the central bank,” said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

“I think the market is also waiting for mining companies’ earnings reports to make it clear how they view the outlook.”

Analysts have forecast a shortage of copper as early as this year, amid signs that supplies may not be as strong as previously thought. And producers including Anglo American and Vale Base Metals lowered their annual forecasts after Panama ordered the closure of First Quantum’s 350,000-tonne mine.

Copper declined, while the metals were also helped by a weaker dollar index, which made metals priced in dollars less expensive for buyers using other currencies.

Specific, The dollar fell 0.23% to 104.05 against the world’s most important currencies.

With the return of the Lunar New Year holidays in China, traders and analysts will be looking for clues on demand in the coming weeks, with construction activity likely to pick up again as the end of winter approaches.