The US currency managed to maintain two consecutive days of rise and recover some ground lost last week. Can it become a trend?
He dollar in Uruguay recovers some of the ground lost in the last week with its second consecutive day on the rise, although the general balance of the exchange rate in the country is a “ironed” currencywhich still cannot come close to the moderate expectations of market players.
He dollar achieved a rise of 0.24% at the close of the day yesterday compared to Monday and traded at 37,788 pesos, according to the Central Bank of Uruguay (BCU). It was the second consecutive increase for the US currency which, with certain ups and downs, accumulates a positive balance of 0.96% during August, two days before the end of the month.
Beyond this slight respite in a context of significant loss of competitiveness and exchange rate backwardness that the country is going through, the exchange rate has fallen by 5.70% so far this year, and is increasingly moving away from expectations of the market, despite the recurrent downward adjustments in the projections.
In that sense, the last Economic Expectations Survey of the BCU registered an expected price of 39.61 pesos for December of this year.
Could this be the start of an increase in the exchange rate?
The two consecutive days of the rise is not the only thing that the monetary authorities or the markets look at: they also carefully observe what happens in Brazil and in USA.
In the case of the northern country, whose currency —the real— is one of those that has strengthened the most in relation to the US currency —especially, from the bet of investors on the currencies of emerging economies—, the dollar has a cumulative increase of 2.72% in August. For Uruguay This is good news, not only in general terms, but insofar as the weight tends to accompany the movement of the real by the influence of the Brazilian economy on local development.
On the other hand, the United States has already warned of possible new increases in the reference interest rates — news confirmed once again in recent days by the president of the Federal Reserve (Fed), Jerome Powell which put a pause on the flight of investors to other stores of value, in the midst of a context of weakening of the dollar worldwide. This, although we will have to see what happens in the coming weeks, may have an impact on a strengthening of the US currency in response to the new implementation of a tight monetary policy.
If we add to this the possible effects —so far, very moderate— of future cuts in the Monetary Policy Rate (MPR) by the BCU, it is possible to expect that, at least, the dollar do not continue to depreciate nationally. Although it should also be taken into account that “ironed” dollar at current values it is the most convenient for government policies at this time.
Source: Ambito
