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Dollar extends fall and consolidates below $900 barrier as copper advances

The price of the dollar that fell this Thursday increased and consolidated below the $900 barrier in line with the decline of the global currency and the progress of copper, and the markets continued to respond positively. with the lower than expected inflation data in the United States, which opened up the prospect that the Federal Reserve will not continue to be so aggressive in its process of raising interest rates.

The US currency was trading at $884.16 against $889.50 in the previous session.

So now $166.84 is sitting under it reached a high of $1,051 on July 14 and what it took the Central Bank to implement foreign exchange intervention to stop the rise of the currency.

“The price of the dollar shows a further fall in the current session, after inflation data was known yesterday in the United States that was below expectations, and the producer inflation data called this morning also has an impact on the currency, considering that the Federal Reserve would have an impact. less reason to continue raising the interest rate strongly,” said Ricardo Bustamante, head of trade studies at Capitaria.

US inflation slowed more than expected in July due to lower energy prices. The consumer price index rose 8.5% in its twelve-month reading, cooling from a 9.1% increase in June, which was the highest level in four decades. Furthermore, the figure was less than the 8.7% increase anticipated by the market.

In this context the dollar indexwhich measures the currency’s performance against a basket of six liquid currencies, including the euro, fell 0.4% to US$104.66 points.

The less unfavorable prospect of upcoming rate moves in the United States boosted the price of copper, Chile’s main export. Three-month futures rose 0.92% to $3.48 a pound on the London Metal Exchange.

“The prospect of US interest rates coming in lower than previously expected is helping sentiment,” Ole Hansen, head of commodities strategy at Saxo Bank in Copenhagen, told Reuters.

“Copper got a boost after an increase in risk appetite and after a global drop in the dollar,” he said.

Thus, copper prices recovered after earlier falls after data showed weakness in the construction sector in China, the world’s largest consumer of the metal.

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