The dollar began the week by resuming its downward trend, with last Friday marking the end of a six-week losing streak. This was due in part to the decision by the Federal Reserve to stop raising interest rates, with the dollar falling $7.90 on the Chilean Electronic Stock Exchange and reaching a value of $876.10 unit.
“Tomorrow the minutes of the last meeting of the United States Federal Reserve will be known, which could be key to determining a clearer trend in the short term for the dollar,” said Ricardo Bustamante, from Capitaria.
The Chilean peso also rose in line with the advance of copper, one of its main supports. The price of copper has risen due to hopes for new stimulus and demand in China, the weakness of the dollar, and protests at a mine in Panama.
This has led to increased copper consumption, with the three-month value of copper rising 1.94% to US$3.81 per pound.
The weakening of the dollar has also led to a reduction in the price of metals for non-dollar holders, prompting a global trend of the dollar losing strength.
“The dollar’s weakness has to do with movements in the rates markets, especially after the November Fed meeting and the CPI last week,” said Dane Cekov of Nordea.
The Federal Reserve will play a key role in determining whether the dollar’s downward trend is sustained, with the market convinced that the Fed is done raising rates despite the Fed’s unwillingness to say so.