He dollar fell 1.06% in the last four days and, after a week in which it operated downwards, it reached its lowest values in more than a month and threatens to move away from the 40 peso range, according to data from the Uruguayan Electronic Stock Exchange (Bevsa).
Taking the quote from Central Bank of Uruguay (BCU), the interbank is at 39,558 pesos, in a phase of decline if the last few days are taken into account, after ending on Monday at 39,982 pesos, a decrease that seems to put an end to the bullish stage of the dollar, which made it appreciate 6.73% in three months and recover much of the ground it had lost during the year.
After exceeding 40 pesos on Wednesday the 2nd, the US currency did not reach that range again and began a phase of ups and downs, which led to four consecutive falls during the last week.
Specifically, the ticket is at its lowest value in almost a month and a half, since the last time it traded below its current price was last October 5, when it was sold at 39,397 pesos.
Thus, the fall at a monthly level is of the order of 1.04%, while the dollar accumulates a decline of 1.28% compared to the end of 2022, which falls to 0.61% in the year-on-year comparison.
What does the market expect about the behavior of the dollar?
With this latest data, the dollar is far from the value expected by the market, if the latest Economic Expectations Survey(EEA) that prepared the BCU, where analysts believe that the exchange rate will be at 39.95 pesos at the end of the month and will stretch to 40.10 pesos at the end of the year.
The specialists consulted by the monetary authority corrected upwards their projections regarding the exchange rate expected, compared to the previous EEA, so the current value seems to be divorced from those expectations.
Even if you look at the long term, analysts believe that the note could be worth 42.50 pesos at the end of 2024 and even appreciate until reaching 44.90 pesos at the end of 2025.
The unexpected drop in interest rates
For his part, the central bank Days ago, it defined a new reduction in the Monetary Policy Rate (MPR), which was around 9.25% and surprised a good part of the market, when it was thought that the end of the cycle of reductions was going to begin.
Coinciding with the reduction of reference interest rates, Investors could see offers in pesos as less attractive and turn to the dollar, which may give room for appreciation in the coming weeks.
However, we will have to see what happens with the dollar at a global level, where the forecast is that it can remain strong due to the expectation that the next movement of the Federal Reserve United States (Fed) It’s not going to be a cut.