The dollar opened the day lower, but finally ended up closing with a significant rise. The Chilean peso lost once morest its United States pair on a Tuesday marked by the advance of the superpower’s currency at the international level and despite the fact that the value of copper maintains its gains.
In addition, the local exchange market has in its sights the decision on the Monetary Policy Ratewhere a rise is expected from the Banco Central. This, given the high levels of inflation registered in Chile.
Specifically, the dollar rose $11.12 from yesterday’s close and is trading at $892.82. Given this, the US currency recorded two consecutive days on the rise, where it recorded gains of $15.74 during this streak.
During the day’s trading, marked by volatility, the US currency posted a high of $898.27 and a low of $873.08.
The Chilean peso faced and led a bad day for emerging market currencies, where only three currencies out of this group of 23 managed to appreciate once morest the dollar today. The local currency was the second largest drop once morest the US currency on Tuesday, according to data from Bloomberg.
“Today the Central Bank of Chile decides its monetary policy, where the market expects an increase of 75 basis points. All in all, if we see a decision above what the market expected, we might see a stronger peso once morest the dollar and witness how the exchange rate gives ground. If the interest rate were to rise but less than expected, the exchange rate might continue to gain upward ground”, projected the senior market analyst at XTB Latam, Juan Ortiz Godoy.
Meanwhile, the Renta4 studies manager, Guillermo Araya, stressed that the effect of the plebiscite would have already faded. “The market estimated that uncertainty remains and there are other structural factors of the economy that continue to affect it,” added Araya, who also pointed out that the Central Bank’s decision is key today.
In this line, the Chilean peso loses strength despite being a day where copper gains ground. The price of Chile’s main export gains 1.32% and is trading at a value of US$3.46 per pound.
For its part, at the international level, the dollar once morest a basket of the most important currencies continues to gain strength. If at the beginning of the day, the dollar index gained 0.42%, now it does so at 0.66%. With this, it is affirmed at the highest levels for two decades.
The dollar appreciated around the world following a report on the US service sector in August reinforced views that the economy is not in recession, Archyde.com explained.
“People recognize that the US economy is slowing down, but it’s still the least ugly of the contest,” Bannockburn Global Forex’s Marc Chandler told the news outlet.
Chandler also added that “while the dollar’s path of least resistance is to the upside, its strength will be challenged next week when the US Consumer Price Index for August is released.”