Monday , May 17 2021

The dollar fell in Chile today

After Powell's words moderated expectations of an increase in the rate, the exchange rate lost $ 6 a day.

The President of the Federal Reserve of the United States on Tuesday held a speech that softened expectations of increasing market rates and immediately distracted the dollar from the global level. But, as it happened yesterday after the closing of the foreign exchange market, the local exchange rate reacted today.

At the end of the day's operations, the dollar in Chile was $ 669.5, a drop of $ 6 compared to yesterday's price.

The key, according to realtors in the market, is in comments made yesterday by Federal Reserve Chairman Jerome Powell. In a speech with which investors were uncertain, the government announced that the interest rate was close to its neutral level, which led to the light that the US power plant could make a break in the process of monetary normalization.

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This generates today a boom in the new currencies, which at this moment are rising against the dollar, with few exceptions.

It should be recalled that this class of assets is in trouble during 2018, due to the fact that in the first months of the year, the Federal Reserve had signs of a more aggressive schedule than what was considered in 2017.

For its part, the global price of the greenback – measured according to the US Dollar Index, which contrasts with the basket of currencies – has been virtually unchanged since it fell yesterday with Powell's words.

Of course, more volatility is expected in the short term, as investors are still waiting for new developments in the trade war between China and the United States. "The market shows caution before the G20 summit, especially since Donald Trump commented that there is still" a lot "to be resolved in the tariff fight with China," said Ricardo Bustamante, head of trade studies at Capricia.

In this regard, the analyst claims that after the example, which will be held on Saturday in Buenos Aires, there may be more clarity about the prospects for the foreign exchange market.

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