The dollar in Chile began the week with a strong rise, despite the fact that economic activity in Chile during March was above market expectations. Investors now await the decision of the US Federal Reserve (Fed) and the Central Bank of Chile regarding interest rates.
The dollar is at its highest level since the end of December last year, and the Chilean peso is the fifth currency that depreciates the most among the currencies of emerging countries, during this day, according to Bloomberg.
Given this scenario, the US currency is only $15 away from its all-time high.
“The US currency has been boosted by a Federal Reserve willing to normalize monetary policy in order to control strong inflationary pressures, with a possible increase of 50 basis points this Wednesday, which has been supporting the greenback, which even its index, the dollar index, reaches values that have not been seen for 20 years”, explains the senior market analyst at XTB Latam, Juan Ortiz,
Specifically, the dollar in Chile closed with a rise of $9 and registers a value of $861. The US currency had bid farewell last Friday with a drop of $5.76.
Another effect that explains the weakness of the Chilean peso is the drop in the price of copper, which was not listed today on the London Metal Exchange because it is a holiday in the United Kingdom.
“The copper price continues to show weakness, amid strong fears regarding economic activity in China, due to confinement measures due to the increase in Covid-19 cases, hitting expectations regarding the most important country in the demand for raw materials”, Ricardo Bustamante, head of trading studies at Capitaria.
For his part, the chief analyst of Admiral Markets commented that “we have no doubt that it will be a volatile start to the month, which might settle wide trading ranges for the first half of the second quarter of the year above $820 per dollar.”
Along these lines, the future of the price of the dollar in Chile will be marked by the decisions made at the monetary policy meetings of the Central Bank of Chile and its peer in the US, among other factors.
