Chile: USD accelerates its rise and increases by more than $15 ahead of the Fed meeting.

The parity rose by $15.03 to $964.34 - session highs - before noon, according to public quotations

Gabriel Micillo•Tuesday, March 19, 2024•1 min read

Markets will be attentive to the projection map and statements from the Fed’s Chairman, Jerome Powell, to gain more clarity on the path of interest rate cuts in the US.

On Tuesday, the dollar surged strongly, influenced by the more cautious stance of international markets as the Federal Reserve of the United States meeting unfolds, which will conclude tomorrow Wednesday with its monetary policy statement.

The parity rose by $15.03 to $964.34 – session highs – before noon, according to quotations. The dollar index climbed 0.25% to 103.84 points, while Comex copper futures retreated 1.39% to $4.07 per pound.

It’s been established that the Fed would deliver a cautious message, and the outlook for multiple interest rate cuts throughout the year has moderated.

The US central bank began its two-day meeting this morning, and traders have virtually ruled out keeping rates unchanged in the current range of 5.25% – 5.50%. Attention will focus on the members’ projection chart (dot plot) and subsequent comments from its Chairman, Jerome Powell.

Yesterday, the exchange rate couldn’t sustain its short-term downward trend and may be resuming its main upward trend. The major issue for the Chilean peso is that there are no significant levels until $965 and above $975 in the dollar’s quote, and as such, we are witnessing these violent movements.

It’s likely that foreigners have paused their dollar sales in the last two days due to the jump in Treasury bond yields. The sharp decline in copper may also be a response to the increased caution ahead of the Fed’s decision.

Check out our free forex signals
Follow the top economic events on FX Leaders economic calendar
Trade better, discover more Forex Trading Strategies
Open a FREE Trading Account

ABOUT THE AUTHOR See More

Gabriel Micillo

Gabriel is a certified public accountant graduated from UNNE (National University of the Northeast, Argentina) and a software developer, currently pursuing a Master's degree in Finance and Economics. With nearly 8 years of experience working for accounting firms and brokerage firms. Concurrently, he has produced economic and financial reports on the current state of regional economies for the clients of the establishments where he has worked. Additionally, he assisted colleagues like Ignacio Teson in the drafting and editing of articles on similar topics in English language.