The dollar rose 0.64% in the last month but remains far from $39

The dollar rose 0.64% in the last month but remains far from $39

He dollar The last week of the month began with a new drop of 0.15% compared to Friday’s session, and again moved away from the floor of 39 pesos, even after the Central Bank of Uruguay (BCU) reference interest rates will fall and a positive rebound of the US currency will be expected.

In this way, the foreign currency remains far from significant recoveryeven despite having accumulated a rise of 0.64% during the last month.

The behavior of the dollar continues to be one of the major problems for the economic management of the country. So far this year, according to data from the Electronic Stock Market (Bevsa)accumulates a fall of 2.93%, which represents a total of 1.18 pesos less compared to its value at the beginning of 2023.

April was not a great exception to this behavior: although managed to rise 0.64% in the first three weeksthe series of losses led to the positive difference being only 0.25 pesos, and that the price is still far from the floor of 39 pesos. In fact, yesterday, the US currency closed at 38,896 pesos.

Although the strategy of lowering the Monetary Policy Rate (MPR)even to the detriment of inflation rates and compliance with the target range in this regard, seeks to strengthen the dollar against the peso —to improve the competitiveness of the local economy abroad— so far, and to maintain the current behavior , it seems difficult for the reference currency to achieve the projections for this year of the last Economic Expectations Surveywhich forecasts a dollar at 41.28 pesos on average, which would imply an increase of 6.12% for the end of the calendar year.

A weak dollar globally

One piece of news that may be positive for the country is that the dollar It will continue to fall globally from the highs it reached last year, according to estimates by professional investors consulted by the Bloomberg agency, who warned of an undervaluation by the market in the face of the next easing cycle of the United States Federal Reserve (Fed).

According to the last survey MLIV Pulsealmost 87% of the 331 respondents expect for the Federal Reserve to cut interest rates to 3% or less, in a relaxation that 40% believe will begin this year. The forecast contrasts with market prices that place the implicit policy rate at around 3.05% in two years.

Professional investors polled by Bloomberg said they expected a dollar down because the yield path as projected is too high. Furthermore, they estimate that banking sector tensionslike those that occurred in March, will be limited to United States entities, leading the Fed to take moderation measures without this being replicated in other large central banks.

As a curious fact, a surprisingly large number of high-end investors (34.5%) believe that the appreciation of the yen or yuan will be the main cause of the fall of the dollar.

This may be positive for Uruguay in terms of an extra contribution to the strengthening of the local currency, although the impact has not yet been seen: this is because, while the dollar strengthened in the world between January and September of last year, in Uruguay did not do so as a result of the high prices of commodities that the country exports; therefore, when the process of falling in the price of the US currency began globally, the country had been decoupled in the previous months.

Faced with this, variations in the price of the dollar against the peso can still be expected in response to international movements.

Source: Ambito

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