Chile: The dollar falls more than $15 and briefly breaks below the $940 mark following a rise in copper prices.

The currency fell by $15.92 to an intraday low of $939.28 past noon in Chile, although it quickly moderated to $941.3.

Ignacio Teson•Thursday, April 4, 2024•1 min read

The red metal, main export of Chile, climbed 1% to $4.24 per pound, while the dollar index fell 0.2% to 104 points, once again exerting downward pressure on the parity from external factors.

On Thursday, the dollar price dropped further, extending losses from the past two days, amidst a strong surge in copper and following the Central Bank’s rate cut and caution regarding inflation from the Monetary Policy Report (IPoM) released by the issuer.

The currency fell by $15.92 to an intraday low of $939.28 past noon in Chile, although it quickly moderated to $941.3, with a decrease of $14.46 on Bloomberg screens. The dollar index fell 0.24% to 104 points, while Comex copper rose 1% to $4.24 per pound, reaching new 14-month highs.

Hantec Markets’ Senior Market Analyst, Renato Campos, attributed today’s decline to “the words of Fed Chairman Jerome Powell, the advance in copper, and a series of data pointing to a more optimistic environment for the local economy,” while anticipation grows ahead of the official labor payroll report to be released tomorrow in the United States.

International dollar sales intensified this morning after US jobless claims surprised on the upside in their latest weekly reading, fueling hopes that greater labor flexibility will pave the way for the much-anticipated three Fed rate cuts this year.

After reducing the Monetary Policy Rate (TPM) by 75 basis points (bps) to 6.5% – as expected – yesterday Wednesday, the Central Bank released the projections of the IPoM. The president of the issuing entity, Rosanna Costa, stated in the document that the economy is “still in a transition process” and projected an increase in inflation in the coming months, so it will be necessary to transition to lower levels of rates with the right dose of prudence.

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ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.