Dollar: Luis Caputo’s new board debuts under the pressure of the donald Trump tariffs

The Cimbronazo living on Monday global markets After the announcement of the imposition of duty generalized to the products of Canada, Mexico and China by the US government of Donald Trump left the complications to which Luis’s plan is exposed Caputo Just on the day when the new devaluation pace of 1% monthly debuts to reinforce the exchange anchor policy, the dollar is strengthened in the world and the currencies of emerging countries devaluedwhich feeds the relative increase in Argentina regarding its commercial partners.

While there was a relief around noon following the postponement for a month of the implementation of tariffs to Mexico After the conversation between the leaders of both countries, the global financial scenario adds pressure to the Caputo scheme.

Due to the exchange rate, the impact does not translate into an automatic devaluation of the weight. However, the decision to make the exchange anchor more rigid to try to resume inflation deceleration path deepens the appreciation of the local exchange rate and threatens to accentuate the sangria of currency by tourism and the red account of the exchange current account, which has been seven consecutive months. In December, there was also deficit of the exchange balance of goods for the first time in a year and a half.

Dollar: Luis Caputo ratifies its scheme

Before the alarm that was installed in the City of Buenos Aires in the early hours of this Monday, Caputo went out to ratify his economic policy.

In his X account, the minister wrote: “Some asking for the international context. We always contemplate the possibility that there are external shocks, such as the one we are seeing at this time. The best antidote against this is to guarantee Argentines that this government will never move a centimeter of the fiscal and monetary order that we carry out from day 1. we will continue to fight excessive public spending to achieve the greatest possible surplus and continue to lower taxes ”.

Dollar up and bags down

After noon, the dollar index (dxy) rose 0.5%. At the beginning of the wheel, before the agreed suspension between Trump and Claudia Sheinbaum was known, 1%had come to shoot. The DXY compares the US dollar against a basket of strong currencies, such as the euro.

Something similar happened with the coins of Mexico and Canada, who had opened with strong jumps at record levels (in three years for Mexican peso and in more than 20 years for the Canadian dollar) and then cut the decline in the face of novelties on negotiations .

Meanwhile, the world’s bags fell: in Europe they fell to 1.4% (Germany); in Asia, up to 2.7% (Japan); And in Wall Street, the main indices retreated up to 1.3%. In Buenos Aires, the S&P Merval descended 2.2%.

It is clear that The different variables will move to the beat of the news about the negotiations that, in their terms, Trump seeks to establish with the rest of the countries after pressing with the tariff. They will also range based on the tenor of the reactions of the governments involved in the confrontation proposed by the Republican.

“The dollar in the world is strengthening the product of this commercial war where prices in the US are going to rise and the Federal Reserve (Fed), to prevent another inflation rebound surely modify its monetary policy. This will negatively impact the bags. It is important to remember that the great depression of the 30s’ also began by protectionist policies, ”he warned Javier TimermanManaging partner of ADCAP Grupo Financiero.

“This change that the fed can make, It will impact risk assets and especially in the country since to control inflation an exchange anchor was used. To this is added the potential output of emerging assets that complicates the local current account and perhaps its negotiation with the International Monetary Fund (IMF) that watches over more flexible exchange rates. However, it is important to clarify that the political influence that Trump can exert and the macroeconomic improvements achieved (especially fiscal consolidation) can help in negotiation, ”Timerman added on the impact on Caputo and Javier Milei’s plans.

In dialogue with Scopethe financial analyst Christian Buter He pointed out that, although it is a coincidence that the debut of the 1% monthly tab He has coincided with this cimbronazo, “it is good as an example to show how ridiculous the ‘crawling paste'” is. “They established a value of the dollar in December 2023 arbitrarily, then they put an arbitrary indexation and now the speed lowers that indexation. All that without taking into account what happens to prices in Argentina and what happens to the dollar in the world. When you do that and you have the ‘bad luck’ that global timing does not help you, You are totally offside And that’s what we are seeing. It will be much cheaper to bring things outside and that will end up hitting you in the activity and in the local industry, ”said the economist.

Debt, another impact

“So far it is the market that is raising the dollar against the currencies of the affected countries. But, be careful, it can also occur as a government’s own policy of those countries: devalue their currency for the purpose of compensating the rise of tariffs. And that could give a greater impact to the rest of the coins in the region, ”said Buteler.

The analyst caught attention to Another effect on the plans of the Argentine government: “It is a very bad policy from Trump, which will imply a price rise in the US and The Fed has already warned that the casualties of rates were not going to be so many or such. That affects all emerging countries. In particular, Argentina needs to lower the country risk to return to the market and be able to roll its debt. But it also needs the American rate to fall. Country risk is the differential between yours and American bonds. If the American bonds do not lower the rate, you should lower the country risk much more to be able to place debt on the market at a reasonable rate ”.

“The policy that Trump is carrying out can harm us, for more friends who want to show,” concluded the economist.