The international scenario gives rise to the dollar in the local exchange market to define its trend after a largely “ironed” behavior.
He dollar in Uruguay fails to consolidate firmly in an upward trend, and seems to settle back into the definition of “ironing” after a good start to the month that allowed it to return to the 38 peso range—and stay there. However the international context is increasingly prone to an increase in the price of the US currency, can these events be reflected in the local market?
With a new drop in yesterday’s session, the dollar It seems to get into rhythm in a dynamic that intersperses one or two consecutive rises with one or two falls, also in a row. With yesterday’s decline of 0.20% and the price closing at 38,053 pesos—according to official data from the Central Bank of Uruguay (BCU)—, still manages to maintain a cumulative positive of 1.23% in Septemberbut it does not seem that, in the short term, it will be able to reverse more than this the decline that it has seen this year, which is 5.04%.
The international context, however, unlike what happened during more than the first half of the year, seems favorable to a appreciation of the dollar in the local exchange market. In fact, yesterday the US currency touched maximum of six and a half months after the announcement of the Federal Reserve (Fed) to maintain unchanged the reference interest rates and, with it, the restrictive monetary policy.
Positive signs from outside
The Fed’s decision was already expected after data from the Fed were published last week. inflation in the North American country, much less optimistic than the authorities expected and with the information nothing less than that the Underlying inflation had risen in August for the first time in six months. Therefore, yesterday they announced that interest rates will remain between 5.25% and 5.50% perfectly responded to the market perspectives.
The most relevant thing is that the organization also tightened its monetary politics and it does not seem that, in the short or medium term, this situation is going to change. The result is that the dollar recovers a good part of the value it lost after its weakening at a global level, and once again attracts the confidence of investors, who no longer feel so comfortable with the risk represented by emerging market currencies – and which have become an asset very interesting for these in recent months.
This general mood was also observed in the increase in dollar indexwhich measures the performance of the US currency: after the Fed’s announcement it reached 105.68 units, its highest level since early March.
In Uruguay observe all this carefully: a rise of the dollar globally can mean a similar correlation at the local level, something highly desired by the exporting sectors – which incessantly complain about the loss of competitiveness that comes with the exchange delay of at least 15%—; but seen with more reservations from the government. This because the “ironed” dollar It has been very convenient in terms of controlling inflation and keeping it within the target range.
However, a new decline in the Monetary Policy Rate (MPR) by the BCU—as the markets warn and as the president of the entity himself announced, Diego Labat—, Therefore, this global context could be capitalized in the country as an increase in the price of the dollar that brings it a little closer to the expectations of analysts, which, in any case, are still moderate.
Source: Ambito
