Chile: Dollar decreases amid copper surge pushing it past US$ 4.7 per pound.

Copper prices, Chile’s main export, were once again heading towards the two-year highs reached last month.

On Monday, the dollar opened lower amid a new surge in copper, which surpassed US$ 4.72 per pound in the Comex futures market.

At the start of the session, the dollar was trading at $922.4, down $5.06 from Friday’s close, according to Bloomberg quotes. The dollar index, meanwhile, was down 0.17%, while traders awaited U.S. inflation data that could help determine whether the Federal Reserve might cut borrowing costs in 2024 and to what extent.

Copper prices were once again heading towards the two-year highs reached last month, as expectations of strong demand growth and hopes of interest rate cuts in the United States encouraged investors to enter the market on Monday.

Recent weaker-than-expected U.S. labor market data and a Federal Reserve that ruled out further interest rate hikes led traders to assess increased Fed accommodation this year.

Markets are pricing in around an 80% probability of a rate cut for the Fed’s September meeting, with around 40 basis points (bps) of total expected cuts in 2024, according to LSEG data.

Meanwhile, the strong appetite for Chilean stocks left the Santiago Stock Exchange near its historical highs at the close of trading on Monday, a session in which foreign markets showed slight changes awaiting U.S. consumer price figures.

At the end of the session, the S&P IPSA rose 0.83% to 6,695.26 points, supported by high-weighted domestic stocks such as Latam (2.48%), SQM-B (2.19%), and Banco de Chile (2.04%), which had standout performances, with 18 of the 29 index stocks rising.

The IPSA came close to matching the 6,726.52 points of April 11, which represent its historical high.