He dollar in Uruguay continues to fall and yesterday marked its fifth consecutive day of absencealong with the weakening of the US currency worldwide and despite the monetary policy measures taken at the local level.
The dollar is once again bad news for the export sectors, which observe how the little recovered value is lost almost in dribs and drabs in a month whose balance is heading towards being negative and with five consecutive days of accumulated decline. The currency fell 0.42% yesterday and closed at 39,393 pesosaccording to the official quote of the Central Bank of Uruguay (BCU).
In this way, the dollar once again moves away from 40 peso rangewhere it was able to remain for just one day after a bullish rally that was not enough to fully recover what was lost during the year, which is already 1.69%. In November, meanwhile, the drop is 1.45%.
What is the context of the fall of the dollar?
He dollar falls in a context crossed by two fundamental issues: at the local level, the decision of the BCU to make a new cut in the Monetary Policy Rate (MPR) last Thursday, taking it to 9.25%, despite the fact that they had advanced the possibility of rates remaining unchanged until the inflation expectations of the market will be aligned with the target range.
The data is important since, on previous occasions in which the MPR was reduced—although it was not the main objective—it was expected that the lower interest rates on instruments in pesos would contribute to making the securities more attractive. investments in dollars. And, therefore, increase the price of this currency. The effect, meanwhile, was limited; and, for the moment, it is not observed that this latest cut has had a positive impact on the price of the dollar.
The second issue is the behavior of the global dollar. He also experiences sick days, as seen in the dollar indexwhich compares the US currency with six other currencies of importance in the world economy.
Since November 14, when it reached highs of 105,422 units, the indicator fell to the first half of the axis of the 104 units and, in recent days, it shows a consecutive weakening. In this sense, yesterday it closed at 103,370, while today it already opened lower, in 103,310 units.
This happens while the market waits for the publication of the minutes of the Federal Reserve (Fed) about their last meeting, given the expectation that, finally, there will be no new rise in reference rates.
In Uruguay, Meanwhile, local market players once again adjusted their expectations regarding what they expect to happen with the dollar until the end of the year, registered in the Economic Expectations Survey of the BCU. By the end of November, the median response projected a value of 39.95 pesos —something that, at the moment, seems difficult to happen—; while for December and the end of 2023, they foresee a price of 40.10 pesos.
Source: Ambito
