Fynsa
The potential common currency of emerging economies challenges the supremacy of the dollar. What repercussions would this move have on global financial markets?
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In Chile, the dollar is at historically high levels and with the main factors that have explained its rise already discounted, it only remains to wait for the variables to be resolved.
Bloomberg explains the reasons behind the dollar's strength as a cornerstone of the global economy.
The rise of the dollar is explained by a Dovish Central Bank of Chile and a FED keeping the rate between 5.25 and 5.5
The flow of buying continues to dominate the foreign exchange market, despite sales by both the Central Bank and the Treasury.
In a context of rate cuts by both the Central Bank and the Federal Reserve, it will be especially important to have certainty as to how our currency will move.
The spread between the local rate and the FED rate has been compressed, but the game will continue until we have clarity on the beginning of the rate cut in the US and we discount the level to which the Central Bank will have to adjust rates.
For the time being, it is hard to think that the market alone will continue with rate rallies without a more committed Fed on the way to easing interest rates.
