The dollar exceeds $950 in Chile

The dollar started a new week with gains and remains above the $950 support after closing with significant gains last Friday. The US currency gained in Chile after US employment data made the Federal Reserve less likely to cut rates in March.

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At the end of the day, The dollar rose by $6.25 compared to last Friday’s close on the Chilean Electronic Stock Exchange (BEC) and reached a value of $954 per unit. This is the highest level since the end of October 2022. Additionally, the United States currency rose for the third consecutive day in Chile, gaining $24.5.

However, during afternoon operations, The currency advanced further and reached an intraday high of $959.95 And then it slowed its progress somewhat, according to Beck’s data.

“The aggressive cutting of interest rates by the Central Bank of Chile has significantly narrowed the rate differential between our country and the United States, causing an outflow of foreign exchange due to the carry trade, which has led to the movement of the North American currency. Got support,” commented. Deputy Director of Studies. Capitaria, by Ricardo Bustamante.

However, according to Reuters, the national currency fell in line with the rest of the currencies in the region.

The Chilean peso declined on the day in line with the weakness of copper and the United States currency which was leading in the world. Meanwhile, the metal fell on a rising dollar and demand disappointment in key consumer China, reinforced by renewed focus on the country’s troubled real estate sector.

Thus, The three-month price of copper on Comex, the main futures exchange, fell 1.26% to US$3.77 per pound. Meanwhile, spot copper fell 0.85% to US$3.77 per pound on the London Metal Exchange.

Copper gained ground as a series of policies implemented by China last year to help revive the real estate sector, which accounts for a quarter of China’s gross domestic product, did much to boost the market. Have done less work.

Part of the problem is the reluctance of Chinese banks to make new loans to the sector, highlighted by the liquidation of China Evergrande.

“Until the Chinese real estate sector shows signs of sustained improvement, the base metals will remain under pressure,” said a copper trader. He said the market was quiet ahead of next week’s Chinese Lunar New Year holiday.

Traders also highlighted the dollar’s strength after US non-farm payrolls data was “much stronger than expected”.

Attention also focused on mine closures and disruptions, including the First Quantum Cobre mine in Panama.

On the other hand, the dollar rose against major currencies worldwide to its highest level in two months as traders backed off bets on aggressive interest rate cuts by the Federal Reserve this year.

The dollar index – which measures the currency’s performance against the world’s most important currencies – rose 0.48% to 104.42 points.

The change came after Friday’s strong US jobs report, which exceeded market expectations, and a rise in US bond yields, which boosted the country’s currency.

In an interview with the CBS news program “60 Minutes” that aired Sunday night and ran through Thursday, Powell said the Fed could be “prudent” in deciding whether to cut its benchmark interest rate.

He said a strong economy gave central bankers time to build confidence that inflation would remain slow.

Thus, Federal Reserve funds futures are now expected to decline by approximately 113 basis points (bps) this year, compared to 150 bps at the end of last year. The probability of a cut in March is now 16%, up from 50% a week ago.