Chile: Dollar closes flat, but records its largest advance since mid-2022 in Q1

With Thursday's result, the dollar decreased by $4.72 for the week, completing an increase of $95.78 in Q1.

Written by: Gabriel Micillo • Thursday, March 28, 2024 • 2 min read

• Last updated: Thursday, March 28, 2024

The meeting of the Central Bank of Chile and the “Fed’s favorite inflation gauge” data set the market expectations ahead of Good Friday.

The dollar closed flat this Thursday amid limited transaction flows ahead of the Good Friday holiday, observed in both Chile and the United States. Additionally, market attention was focused on upcoming inflation data that could set the tone in the U.S., as well as the upcoming Central Bank meeting.

The exchange rate retreated by $0.74 to $979.78 in an early closure of the Chilean foreign exchange market at 3:00 PM, according to quotes, while market rates rose in the United States following an upward revision of the fourth-quarter GDP in the world’s largest economy. The dollar index gained 0.13%, and Comex copper rose by 0.3% to $4.01 per pound.

With Thursday’s result, the dollar decreased by $4.72 for the week, but rose by $12.31 during the month, completing an increase of $95.78 in the first quarter. This marks its highest quarterly gain since the second quarter of 2022.

Market volumes are low due to the end of a short week, and there’s still anticipation before tomorrow’s Friday consumption and personal spending indices. “These are the first inflation data we’ll have after the Federal Reserve meeting,” he emphasized, including the Fed’s favorite price data.

He also clarified that “the array of data emerging here in Chile is not as relevant when compared to the Central Bank’s rate decision next week, which has made the market a bit more cautious.” Today, the INE sectoral indices for February and the unemployment rate for the December-February quarter were released, all indicating greater economic strength compared to Bloomberg surveys.

Treasury yields rose early on, after yesterday afternoon when Fed Governor Christopher Waller stated that there is “no rush” to lower the federal funds rate, citing “disappointing” inflation data and the resilience shown by economic activity and the labor market in the United States.

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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.