Chile: Dollar falls more than $10 and trades below $940.

The dollar index was down 0.3%, and the two-year Treasury yield fell by 6.5 basis points, while copper rose 1.2% to $4.5 per pound.

On Friday, the dollar fell below the $940 mark as the weak non-farm payrolls report in the United States revived hopes of seeing the start of monetary easing in the world’s largest economy in September, while the recovery in copper provided additional support to the Chilean peso.

The dollar dropped by $10.65 to $936.85 before midday in the Chilean market, after plummeting to $933 in early trading, according to market data. The dollar index was down 0.28%, and the two-year Treasury yield fell by 6.5 basis points, while copper Comex rose by 1.16% to $4.54 per pound.

The April labor report dominated headlines early in the day. Monthly payroll creation was the lowest since October, the annual average wage growth rate slowed to nearly three-year lows, and the unemployment rate edged up slightly.

The data came in worse than expected, and with it, the market begins to see the possibility of a rate cut before the end of the year in the US. If it is confirmed that the data may worsen in the future, we may see more pronounced exchange rate declines in the coming days.

None of this is terrible— it’s not really a “bad” report— but it’s the first time in a very, very long time that we’ve seen all parts of the report weaker than expected. As a result, the market is once again pricing in a 25 basis point rate cut in September and a second cut before the end of the year.

Martinez emphasized that the figures reaffirm the stance of Fed Chair Jerome Powell, who on Wednesday deemed it “unlikely” to raise the key rate and expressed confidence that monetary policy is sufficiently restrictive. This led to a $14 drop in the exchange rate on Thursday.

On Friday, the initial excitement over the payrolls report moderated an hour and a half later, with the release of the ISM survey of the services sector for April, as although the main index unexpectedly fell into contraction territory (below 50 points), the inflation sub-index grew more than expected, in a scenario very similar to the manufacturing survey that the same ISM published on Wednesday.