The dollar is about to pierce the floor of $39 after more than a month below that price, but a new factor entered the bid for the exchange rate.
He dollar It continues without being able to cross the floor of 39 pesos, despite the fact that the closing of the day on Tuesday —and with a rise of 0.54%, it had remained at 38.992 pesos: with the last drop of 0.10%, it fell back slightly again without being able to take the first big step for the exchange rate. Now, can you maintain an optimistic perspective regarding the Uruguayan peso?
The dollar closed the day yesterday with a decrease of 0.10%and a value that was located in the 38,954 pesosaccording to the official price of the Central Bank of Uruguay (BCU). With this slight drop, the US currency ended a two-day upward streak, but it is already registering a increase of 0.45% in June which, like any rise, generates some hope in the sectors that demand a more competitive exchange rate to stop losing in international markets.
The truth is that the interbank price He resists advancing to the 39-peso range for more than a monthsince May 4, when it closed at 38,952 pesos, thus breaking a previous four-day upward climb, where it had gone from 38,616 pesos to piercing the floor of 39 pesos, settling at 39,074 pesos, between April 27 and May 3.
Now, with the price so close to that elusive floor, one wonders if it is possible to expect an increase that is closer to the value that the US currency should have in the country.
Pros and cons for the rise of the dollar, what will weigh more?
Despite the positive accumulated during the first week of June, a recent event may tip the balance towards the peso: the improvement in the debt rating by the rating agency fitch which happened yesterday afternoon.
As previously happened with the other two large rating agencies, Standard & Poor’s (S&P) and Moody’s, and its support for the Uruguayan economy, Fitch’s rating upgrade could lead to a increased investor interest in local currency instrumentscausing more dollars to enter the Uruguayan exchange market and thus increasing a supply of circulating currency that is already too large for the existing demand.
This situation would obviously lead to a new depreciation of the dollar in the country, to the discontent of the exporting sectors.
Going the other way, however, is the fact that the inflation went back down and Consumer Price Index (CPI) it stood at 7.1% year-on-year in May. This is good news for the BCU and its inflation control policy; but it is also true for those who expect the monetary authority to consider lowering interest rates again at the next meeting of the Monetary Policy Committee (Copom)from the lower pressure on prices.
It remains to be seen, then, what happens in the coming days: if the exchange rate balance leans significantly towards one currency or another or if, instead, the stable trend that has been going on for some weeks continues.
Source: Ambito
