The future dollar fell and devaluation expectations subside

The future dollar fell and devaluation expectations subside
November 14, 2023 – 00:00

It occurred after the debate between presidential candidates and given the decline in the prospects for dollarization to take place.

The future dollar fell sharply yesterday on the Matba-Rofex, which once again diluted the expectation of a possible sharp devaluation in December and January. This happened after the presidential debate and in the countdown to the runoff next Sunday the 19th.

The prices of the currency in this market had spiraled prior to the general elections in October due to high expectations about the implementation of a dollarization of the economy, one of the core proposals of the Libertad Avanza candidate, Javier Milei. But given the lower chances of this program being carried out after the alliance with Together for Change and the readings made after this Sunday’s debate, the market expects that the correction of the official dollar will be more moderate.

In this context, the dollar for the November contract lost $8.90 (2.3%) to $375.20. For December, meanwhile, it experienced a drop of $16 (2.4%) to $663.

US$799 million were negotiated, with an increase in open interest of 2,000 contracts to total US$2,688 million, SBS reported. For January 2024, for its part, the currency fell $30 (3.9%) to $740, and the February 2024 contract lost $25 (2.9%), settling at $821.

For March, meanwhile, the official dollar fell $30 (3.3%) to $890, while for April it fell $33.80 (3.4%) to $965.

The May contract has just shown prices above $1,000: that term lost $28 (2.6%) to $1,055. By July 2024, in turn, the exchange rate sank $40 (3.3%) to $1,200.

There is expectation in the market about the return of the crawling peg (the daily microdevaluations of the official exchange rate). Sergio Massa had anticipated that this week the wholesale dollar would gradually move again, which since last August 14 has remained fixed at around $350 (after the 22% devaluation after the PASO). The new reported guideline is 3% monthly.

It remains to be seen if the restart of the crawling peg is finalized on November 15, as indicated by Minister Sergio Massa, or if the decision is postponed until after the runoff.

Source: Ambito

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