Chile: The dollar rises by almost $10 and surpasses the $950 mark in early afternoon trading

The market is starting to decrease bets on the likelihood of an interest rate cut by the Fed in June,” commented Bci Estudios in light of the new figures.

The exchange rate surged to levels around $950 this Friday, after three consecutive days of declines, while copper eased from its recent highs and a solid employment report in the US triggered a wave of dollar buying worldwide.

At the start of the afternoon in Chile, the dollar rose by $8.12 to reach $950.9 in the Bloomberg series. The dollar index climbed 0.11% to 104.24 points, and Comex copper fell 0.56% to $4.23 per pound. Both moderated their initial trend today, which is contrary to that of recent days, while Wall Street rebounded strongly.

The figures indicate continued dynamism in the labor market. In response, Treasury bond yields rose, and the dollar strengthened, as the market begins to decrease bets on the likelihood of an interest rate cut by the Fed in June.

Obviously, the Fed will not cut rates immediately with such a high employment rate and a monthly core CPI of 0.3%. The 10-year treasury rose to 4.36% – the highest since November – and it cannot be ruled out that it will reach 5%, which would increase upward pressure on the dollar.

It has also been noted in the market that geopolitical tensions add reasons for dollar buying. Brent crude oil is already approaching $92 per barrel this Friday, in part because Israel’s rhetoric towards Iran has become more hostile.

Until yesterday, the local parity enjoyed greater relief around the carry trade strategies that have been hitting the peso. Following signals from the Central Bank of Chile, foreign agents recorded net purchases of pesos worth $516 million on Wednesday – the dollar price plummeted by $20.