The dollar continued its upward momentum at the start of the week, aiming for the $1,000 threshold after closing last Friday at nearly $980. The United States currency in Chile has been on a winning streak, closing the eighth week of the year at a 17-month high.
On Monday, the dollar gained $8.75 compared to Friday’s close on the Chilean Electronic Stock Exchange, reaching a value of $988.55 per unit, the highest since September 2022. Despite hitting a peak of $991 per unit during the day, the currency eventually moderated its upward trend.
The Chilean peso weakened alongside a decline in copper prices, a main driver of the national currency. Factors contributing to the peso’s decline included an increase in copper inventories and market anticipation of signals on U.S. interest rates. Copper futures saw a significant drop, with the three-month value falling 1.68% to US$3.84 per pound on Comex, and the spot value dropping 0.82% to US$3.79 per pound on the London Metal Exchange.
“The Chilean peso fell due to a new decline in the price of copper, the country’s main export,” commented Reuters on the local exchange rate, reflecting a day where regional currencies experienced mixed results as they awaited U.S. data that would influence global monetary policy.
Meanwhile, the dollar began the week on a weaker note, with macroeconomic data expected to provide more insight into global interest rate trends, particularly as U.S. inflation comes into focus. The dollar index, measuring the currency against a basket of major currencies, fell 0.11% to 103.82 points.
Market attention is on Thursday’s release of the core personal consumption price index (PCE), the Federal Reserve’s preferred inflation measure, expected to show a 0.4% monthly increase. Market expectations for a Fed rate cut in May have decreased to 20%, down from 90% a month ago according to CME’s FedWatch tool.