2023-12-29 18:20:00
The dollar closed lower on Friday in its last session in the Chilean exchange marketwhile the currency was on its way to breaking a streak of two consecutive years of gains once morest other currencies in external markets, dragged down by market expectations that the United States Federal Reserve might begin to make interest rates more flexible as early as March .
In the last operations that were recorded in the followingnoon when the bulk of the negotiations had already ended, The dollar was quoted at $884.00 with a drop of $1.85, according to Bloomberg data, moderating a decline that had kept it around $874 following midday. This way, The dollar accumulated an annual increase of $31.75 and $13.89 in December.
He dollar index remained stable at 101.14, while Comex copper futures fell 1%, to US$ 3.88 per pound.
In foreign markets, The dollar is heading for its worst year since the start of the pandemicwhile Wall Street is betting that the Federal Reserve will lower interest rates following controlling prices.
“The dollar / peso closes the day lower, on a day of low trading volume,” said the general director of BeFX, Rodrigo Castillo, at midday., who explained that the amounts were around US$666 million, this is close to half that of the previous session. He added that signs suggest that the US economy is seeing a gradual cooling and agreed with expectations that a rate cut might begin sooner than expected.
“We closed with a very volatile year, where we saw a variation of more than $170 from the maximum to the minimum, and it is most likely that we will continue to see strong movements during the next year, since our Central Bank and that of the United States will be making important adjustments” Castillo added.
After swinging due to misguided projections regarding the end of the Fed’s rate-hike regime, a Bloomberg dollar gauge is down nearly 3% this year, the steepest annual drop for the U.S. currency since 2020.
“The lower volume of transactions in the local market supports these erratic movements in the exchange rate, while at the weekend we will know sectoral data in China that might have an impact on copper, thinking regarding the first operations of next year, which might have an impact on the value of the greenback in Chile”, said Ricardo Bustamante, deputy manager of studies at Capitaria.
Much of the decline materialized in the fourth quarter due to growing bets that the Fed will ease monetary policy next year as the U.S. economy slows. That undermines the dollar’s appeal as other central banks can keep their rates higher for longer.
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