Chile: The dollar drops nearly $10 and falls below the $980 mark.

Meanwhile, the dollar index decreased by 0.3%, dropping below the 105-point mark, while Comex copper, main export of Chile, rose by 0.9% to $4.09 per pound.

The price of the dollar fell below $980 this Tuesday, pressured by international factors amid anticipation for the interest rate decision from the Central Bank of Chile, which will be published after the markets close.

The currency dropped by $8.43 to $977.1 – session lows – before noon in Chile, according to market quotes. The trend is driven by external factors, as the dollar index decreased by 0.27%, dropping below the 105-point mark, while Comex copper rose by 0.94% to $4.09 per pound, despite the 10-year Treasury yield reaching its highest level since November.

The exchange rate is at the upper end of the range for the year, making it more reactive to any downward pressure. Additionally, US data pointed to slightly weaker employment.

Just released, US job openings for February showed an increase from the previous month, but this was due to a downward revision of the latter. This is what investors have for now before the official March payroll report is released on Friday.

Returning to Chile, swap rates rose by up to 7.25 basis points (bp), while attention is focused on the Central Bank’s policy announcement, scheduled for 6:00 p.m. today. In general, analysts expect a key rate cut of 75 bp, less than the 100 bp previously anticipated.

Puffe explained that “clearly the Central Bank meeting will be key,” as “a good part of the depreciation of the Chilean peso has to do with the interest rate effect. It could perhaps be somewhat less emphatic regarding aggressive cuts going forward, when there is still a Fed that is not being so clear on that front.” He also pointed to the display of economic strength brought by yesterday’s February economic activity index.