Chile: Dollar takes an upward turn, surpassing the $970 mark.

The USD was appreciating globally with investors digesting the latest decision from the US central bank, while in Chile, expectations regarding the interest rate differential are once again weighing heavily.

On Thursday morning, the dollar turned bullish as international demand for the currency increased, with the market moderating its optimism following the excitement sparked by the Federal Reserve’s projections at the end of its monetary policy meeting yesterday. Additionally, the interest rate differential between Chile and the United States is once again weighing on the local market.

The currency rose by $3.83 to $972.6 before noon, according to quotations, after opening with a slight decline. The dollar index recovered by 0.38% to 103.78 points, indicating that the currency is regaining global attractiveness, while copper Comex, Chile’s main export, erased its gains and traded flat at $4.05 per pound.

Yesterday, the global dollar fell because Powell maintained the discourse that three rate cuts are coming this year. However, the exchange rate still considers the comments made by Rosanna Costa, President of the Central Bank of Chile, about their policy objective of continuing to lower interest rates.

Meanwhile, market rates rose slightly in the United States, and it was revealed today that foreign agents recorded a net sale of Chilean pesos worth nearly $500 million on Tuesday in the derivative market.

Today, the latest weekly series of unemployment benefit claims was released in the United States, which were slightly lower than expected. Powell mentioned that one needs to keep an eye on the labor market, which is crucial for lowering rates. New data could even change the discourse, shifting from three cuts to two, pushing the dollar upwards.

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.

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