Strong Greenback essential for economic recovery – Chili’s Peso drops on US reports

10-04-2009 11:28

The Greenback posted one of the best results in months against the majority of the 16 most popular currencies during this week’s trading session, as a result of the G-7 indicating that a strong US Dollar is fundamental for the stabilization of the global economy. The US is one of Chili’s most important trading partners and pessimistic data from the North American country at the end of this week had a negative impact on the Chilean Peso.

Strong Greenback

Several G-7 officials confirmed that a strong Greenback is important for the global economic recovery, driving the US Dollar to reach the highest level in a month against the Single Currency and pare earlier losses against a number of main currencies. The US Secretary of the Treasury, Timothy Geithner, and the President of the European Central Bank, Jean-Claude Trichet, reached a consensus regarding the essence of a strong US Dollar to continue the recovery of the global economy and preserve the US status of key reserve currency in foreign exchange markets, improving the Greenback’s outlook.

End of this year

Currency analysts believe that traders’ circumstances may not match completely with the policy makers’ ideas, despite the fact that central bank officials are coming to terms regarding the importance of a strong US Dollar with relation to the world economic recovery. Fluctuating economic reports are still one of the main reasons for the Greenback’s instability. Nevertheless, it is difficult to forecast the development of the Common European Currency, the US Dollar and the economic situation worldwide towards the end of 2009.

Chili’s Peso drops

Chili’s Peso fell today against the majority of the 16 most important currencies on the back of decreasing equities and commodity rates as the US released disappointing jobless figures, increasing concerns about the resilience of the American economy and regarding the period and intensity of the worldwide recession, causing traders to evade emerging currencies like the Chilean Peso.