Dollar today Thursday, May 23 in Chile

Dollar today Thursday, May 23 in Chile
Dollar today Thursday, May 23 in Chile

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This Thursday, the day after its biggest rise in 14 months, the Chilean exchange rate stabilizedawaiting the Central Bank’s interest rate decision, to be published after the closing, and while financial conditions tightened in the United States due to the latest economic information.

The currency fell $1.14 to $909.2 at the beginning of the afternoonaccording to quotes on Bloomberg, after a Wednesday session where it shot up more than $20 due to heavy losses in copper.

At 6:00 p.m., the Central Bank will publish its monetary policy statement, official currency transactions in the country have already been completed. The market is mostly betting on a cut of 50 basis points (bp) in the Monetary Policy Rate (MPR).

“This cut is less than the previous one made in April, when the rate was reduced by 75 bp. An additional concern for the council will be external monetary policies, especially those of the US, since the market sees the expected cuts increasingly distant,” commented XTB Latam market strategist Gioanny Pino.

Restrictions on sight

Meanwhile, the global investment environment was becoming more restrictive. The interest rate on the two-year Treasury bond jumped 6.6 bpand according to the implied rates of the futures market, the probability that the Federal Reserve will maintain the rate in September rose from 42% to 49% in the eyes of the tradersaccording to data from the CME FedWatch Tool.

And the latest S&P Global business survey showed that the US economy is still resisting the adjustments promoted by the central bank. The composite Purchasing Managers’ Index (PMI) rose from 51.3 to 54.4 points in May’s preliminary reading, defying expectations.

Additionally, in another report published this morning, unemployment claims fell more than expected in its latest weekly series.

All this occurred after the Fed’s minutes set off market alerts yesterday afternoon, due to the predominant position in the Federal Open Market Committee that conditions will probably have to remain restrictive for longer than expected.

For its part, Comex copper extended its decline with a drop of 1.2% to US$ 4.79 per poundwhile the dollar was trading stable against a basket of global peers.

 
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