The currency chained its second consecutive day on the rise at the local level in a context of recovery on a global level, waiting for what will happen to the Fed rates.
He dollar in Uruguay chained its second consecutive day on the rise and is timidly positioned in positive ground at the beginning of December. Meanwhile, international markets are recovering after what was also a negative November, waiting for what may happen with the interest rates in USA.
He dollar It rose 0.17% at the close of trading yesterday compared to Monday, and thus achieved its second consecutive increase, settling at 39 pesos after having fallen to the range of 38 pesos after two months. With a quote of 39,170 pesosaccording to data from Central Bank of Uruguay (BCU)is still far from the latest market projections for these dates regarding the correction of the exchange rate delay in the country.
In any case, the slight improvement in the value of the US currency allowed December to be, still very provisionally, in positive territory, with a cumulative increase of 0.13%. This is not the case when considering the behavior of the entire year, where there is a 2.25% depreciationafter a November that was recorded as the second worst month of 2023 in exchange terms.
What is happening in international markets?
He global dollar, Meanwhile, he continues his path of subtle recovery: dollar index closed higher yesterday at 103,995 units—a rise of 0.33%—; while today it opened at 103,905, although it later remained stable above 104 units. These levels are close to its maximum in two weeks.
Although the currency appears to be in a positive behavior based on the reassuring statements of the president of the Federal Reserve (Fed), Jerome Powellthat there is still no firm decision on interest rates — and that increases are still not completely ruled out for next year, although it probably won’t happen now in December since rates are “well within restrictive territory”—; We will have to see what happens in the following days.
Mostly, since the fall of the 10-year Treasury bondsdragged by the possibility that is being debated among investors that the US economy cools faster than expected and that, therefore, the Fed must advance the schedule of cuts in reference rates – thus reducing the value of the dollar.
“The market is comfortable with the idea that the economy is slowing down, consumption is facing headwinds, but they don’t know how much it is going to slow down,” he explained. Ian Lyngen, head of US rates strategy BMO Capital Markets in NY to the Reuters agency. “That’s why people are willing to value a possible rate cut in the first quarterbecause the slowdown could be greater than expected,” he added.
Federal funds futures traders Federal Reserve are valuing more than one 50% probability that the central bank will begin cutting rates in March, and that rate reductions of 30 basis points will occur until December 2024.
In any case, we will have to wait first for the November employment datawhich are expected to be positive for the United States economy.
Source: Ambito
