Chile: USD reverses decline and rises to over $965 amid increased caution.

The price of the dollar reversed its opening decline and rose at noon on Monday, regaining a small portion of what was lost in Friday’s collapse.

The price of the dollar reversed its opening decline and rose before noon on Monday, regaining a small portion of what was lost in Friday’s collapse, this time aligned with the global interest rate environment as the February CPI release in the United States approaches.

The dollar rose by $3.5 to $966.2 in the Chilean exchange market, according to quotes, after opening the session slightly lower. The dollar index – which compares the currency against six global peers – rebounded slightly by 0.16%, in line with the rise in U.S. sovereign credit conditions, as the two-year Treasury yield rose by 4.6 basis points (bp).

Global markets tended to cool down – stocks also fell in New York – as the February CPI release in the US approaches, scheduled for Tuesday morning, as this could test the relative certainty with which traders expect an initial cut in the federal funds rate in June.

The median estimate from surveys suggests that the inflation rate may have remained at 3.9% annually, while the core series – excluding food and energy – may have eased by two tenths to 3.7% annually.

The Chilean peso depreciated on Monday despite the fact that Comex copper, main export of Chile, rebounded by 0.48% to trade at $3.91 per pound.

In other news, Chile aims to move past a year marked by restrictive monetary conditions, weak consumer demand, and inflation above the target; both the government and the central bank estimate that growth will stall in Q1 2024.

However, things are starting to look better: Finance Minister Mario Marcel stated that the economy will expand by 2.5% in 2024, a pace that would surpass the regional average, according to most analysts.