Reversing the fall with which the day began, the dollar resumed its rise in the national interbank market. The movement reflects a new session of high volatility, amid projections that point to a favorable result for investments in the exit plebiscite to be held this Sunday in Chile.
At noon, the dollar is up $0.835 from Monday’s close, trading at $886.375.
The appreciation of the US bill in the local market occurs in the midst of a sharp drop in copper. According to Cochilco, the red metal fell 4.86% on the London Metals Ball to US$3.588 a pound cash grade, its biggest daily drop since last March 8, when Chile’s main export sank 5.21 %.
This would explain the high volatility of the currency in the local market. “The injection of foreign exchange by the Central Bank was offset by a sharp drop in the price of copper, the country’s largest shipment,” Archyde.com said.
The movements of the currency occur despite the voices of the market that highlight the decision of the Central Bank to take a flexible line of credit with the IMF, for regarding US$18.5 billionfunds that the issuing entity said it would only use “in the event of a profound external blow.”
Meanwhile, the dollar index, which measures the dollar in relation to a basket of currencies, has been recovering ground throughout the day. One of the factors that boosted the currency in international markets was the unexpected employment data reported by the first world power, accounting for 11.2 million jobs offered during July.
The strength of the US currency comes following weeks where it reached maximums not seen 20 years ago. The eyes of the market today will be on the statements that some members of the FED may make, and that are seen as “these are crucial clues to know more clearly if the next rate hike will be aggressive and if it will be 75 basis points like now the market predicts it with a 66.5% probability”, explains Juan Ortiz, senior market analyst at XTB Latam.
Specifically, agents will be attentive to the statements of John Williams, a member of the Federal Open Market Committee of the FED. In addition to this, the market will be attentive to the Consumer Confidence index in the North American giant.
