He dollar in Uruguay had a strong setback after five consecutive days on the rise that left it on the verge of being able to surpass the “ceiling” of 40 pesos, and lost 32 cents from one day to the next, dragged by the behavior of the currency worldwide.
He dollar was going through a bullish streak in the local exchange market, with five consecutive days of considerable increases that raised its price by 2.22%, taking the price from 39.07 to 39.96 pesos. However, this rally was abruptly interrupted with the decrease of 0.80% that he experienced at the close of business yesterday.
In this way, and according to official data from the Central Bank of Uruguay (BCU)the US currency was quoted at 39.64 pesos and once again moved away from 40 pesos, a value that is a difficult ceiling for the exchange rate to overcome, with only one day in the entire year above that price, on November 1.
On a monthly level, the dollar still registers a cumulative increase in 1.33%; while in the year he has lost a 1.08% of its value.
An anticipated decline in the global dollar
The collapse of dollar At the local level it was almost expected if you observed what happened in the last two days at global level: already on Wednesday, the dollar index it had fallen 0.82%—a value very similar to what the currency finally lost in the Uruguayan market—; and yesterday fell another 0.87%going from 102,477 to 101,578 units.
These values are the lowest since the end of July, and respond to the possibility that the United States Federal Reserve (Fed) start the cycle interest rate cuts reference during the first quarter of next year, thus reducing the cost effectiveness of the investments in dollars —and, therefore, the value of the currency.
“There was an element of surprise: how far the Fed to give the market what it wanted. “Christmas came early,” he explained. Fiona Cincotta, of City Index, to the Reuters agency. “It is possible that the dollar continues to weaken, but I think what is worrying is that if the Fed lowers rates very quickly, inflation he could return to his level. “It is a scenario that we have seen before and that will weigh on the minds of investors, although not immediately, since we are still in the euphoria of the decision.”
Meanwhile, the global dollar accumulate one drops around 2% this week, the biggest weekly drop in five months, reaching the lowest values in around four months.
In Uruguay, This context can impact further declines in the local pricewhich would move the exchange rate considerably away from the market expectationswho expect a dollar at 40.10 pesos at the end of the month.
Source: Ambito
