The dollar continues to move away from $970

The dollar looks to maintain its downtrend after falling this Monday after two consecutive days of gains. Moreover, in the context of the United States market, the currency in Chile is losing its grip and moving away from its highest levels in more than a year, the previous day being a holiday in the superpower.

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Looking towards the end of the day, The dollar fell by $4.4 compared to Monday’s close on the Chilean Electronic Stock Exchange (BEC) and reached a value of $962.45. Unit. If this continues, the currency will register gains for two consecutive days.

Dollar value in Chile on February 20, 2024

However, the dollar hit a low of $960.65 during early afternoon trading and then pared its decline.

“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.

Also, Chile’s peso and most Latin American currencies rose on Tuesday as investors awaited the release of minutes from the Federal Reserve’s last meeting, with investors anticipating the US central bank’s next interest rate moves.

The US Federal Reserve is expected to cut the federal funds rate in June, according to a slight majority of economists polled by Reuters, saying the biggest risk is that the first rate cut will be later than expected. .

Meanwhile, the Chilean peso is gaining strength in line with the 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 0.36% to US$3.85 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 rate on a five-year loan by 25 basis points.

Dollar value in Chile on February 20, 2024

“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 0.13% to 104.16 points 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.

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