He dollar in Uruguay he walked away from the 40 peso range despite having been, once again, a few cents away from reaching the price it has not held since December of last year. This happened despite market expectations regarding a new rise in the value of the currency, in line with the global outlook.
He dollar It fell again after the increase with which it closed last week, and fell 0.31% compared to Friday. In this way, and also dragging the four days of decline that occurred in the third week of October, the US currency closed at 39,818 pesos, according to the Central Bank of Uruguay (BCU)and once again moved away from 40 pesos.
The news has two sides: the positive is that, despite the fact that in the last six exchange days the dollar fell by five, October still remains in green numbers, with a accumulated appreciation of 3.27% in the month. On the other hand, the drop in the local price went against what was expected in the market, after the situation of general support at the opening thanks to the fact that the yield of the bonds of the Treasure 10-year US will exceed 5%.
What does this mean? That, despite the fact that the world received the news positively with an increase in the dollar —while a greater strengthening of the currency is expected in the coming months—, in Uruguay the impact did not come; or it was not enough. And the price remains relatively stagnant.
An encouraging global situation
The return on 10-year notes, which hit a high of 5.021%—given investors’ acceptance that central banks will keep interest rates high, especially in USA-, also led to dollar index to operate at 106.1 units, announcing what “on paper, should be a good week for the dollar”, according to Chris Turner of ING.
The analysts of JP Morgan, Meanwhile, they anticipate that the dollar will remain strong in the next 3-6 months, driven by factors such as US exceptionalism and wide interest rate differentials.
Given this, in Uruguay The week was also expected to start with a rise in what remains an extremely positive October compared to previous months—although the decline so far this year is still 0.63%. However, the 0.31% drop, much stronger than the movements the currency experienced last week, surprised the local market.
Although it seemed that the dollar had been readjusting to the global situation, with a very good September – which registered a valuation of 2.56″ from “end to end”, the highest in 2023 (at least until the end of October) -, the last few days have paid the hypothesis of a stagnation in the currency. Something that was also supported by the fact that, in an optimistic and supportive scenario in relation to the US currency, the local price behaved in the opposite way.
In any case, analysts and investors still maintain the expectation that the dollar reach 40 pesos by the end of the year, which would mean the recovery of the total value lost during the year.