The dollar in Chile closed Thursday with a significant drop, pressured by higher copper prices and a change in the position of the US currency as the main “safe haven” asset.
According to data from Bloomberg, the exchange rate fell $16.37 to trade at $837.83. This is its biggest drop since February 25 of this year.
Although investors around the world have returned to liquidate their riskiest positions, the dollar has not been strengthened to the same level as in past weeks.
In fact, the dollar index recorded a decline of 1.02% to 102,748 points and was again below the highs reached in 2017. The index measures the overall strength of the US currency, when compared to a selection of other currencies.
A) Yes, The Chilean peso ranked as the second currency with the best daily performance among the emerging ones, and fifth worldwide.
According to the analyst senior of markets of XTB Latam, Osvaldo Videla, the situation that the exchange rate experienced today is explained by two factors: the situation in China and the role of the United States in the geopolitical conflict and the management of its own economy.
“The confinement measures established in Shanghai could begin to relax for the opening of trade and free movement of people, as well as a relaxation in the industrial sector. It is estimated that this opening could keep up the demand for copper, which was stagnant due to mobility restrictions in the aforementioned country.”Explain.
“The second front is that the situation in Ukraine is becoming tense again, as the United States is actively trying to supply long-range missiles to the country and help break Russia’s Black Sea blockade,” he adds.
copper boost
The lower exchange rate was supported by the rise in copper prices, Chile’s main export product.
the red metal closed with a daily variation of 0.24% at US$ 4.213 a pound on the London Metal Exchangegathering expectations that China will put a stop to the spread of Covid-19 in major urban centers and carry out an infrastructure stimulus plan to adjust to its growth goals.
“Technically, the exchange rate is in the support zone of $850, where it is estimated that it could break down to place it at values around $845”says the analyst senior at XTB Latam, Juan Ortiz Godoy.
“All while copper continues with the rises we have seen in previous sessions and the dollar index continue with corrections,” he adds.