Operators responded to the inflationary acceleration data with higher projections of a first rate cut in the second half.
He dollar at a global level was trading while awaiting inflation data in USA and signals the direction of the monetary politics of the Federal Reserve (Fed); but he had a rebound after it was learned that prices rose more than expected during March. Meanwhile in Uruguay, The currency has had a week with strong ups and downs in anticipation of a possible new cut in reference interest rates.
He global dollar began Wednesday with a virtually unchanged price, as traders waited for a key report on the inflation determining factor in finally burying the hopes that the first rate cut of the Fed happen in June. In that sense, and before the publication of the data, the dollar index —which measures the price of the US currency in relation to a basket of six currencies— fell 0.04% to 104.04 units.
Likewise, the money markets valued the possibility of a reduction in the reference rate in June at 50%, according to the tool FedWatch of CME Group. The possibility of it being maintained had risen to 46%.
However, after learning that the CPI of the United States corresponding to March was 0.4%, slightly higher than the expected 0.3%; and which accelerated from 3.2% to 3.5% year-on-year, the futures of the dollar index they shot up 0.65%. This, given the strong possibility that the Fed, In the face of less favorable results, continue pushing the rate cut into the second half of the year, which is currently at its historical maximum range.
Local instability in a scenario of expectations
In Uruguay, meanwhile, once again dollar It behaved practically in the opposite direction to the currency at a global level: with a sharp drop of 0.77% at the close of Tuesday, it was quoted at 38,494 pesos and settled again in the range of 38 pesos. On Monday, however, it had recovered 0.71% of its value, which marked a sharp change of course for the greenback in just two days, visibly contrasting with the stability at the international level.
Despite the ups and downs, The US currency accumulated an increase of 2.51% in April, although it has an accumulated depreciation of 1.35% at an annual level, after falling 0.53 pesos since its last exchange day of the year 2023.
This happens amid widespread expectation of a possible new cut in the Monetary Policy Rate (MPR) by the Central Bank of Uruguay (BCU), around 25 basis points, going from the current 9% to 8.75%. A measure that could support the dollar in the local exchange market —although the government expects few effects in this regard and it seems to be a more symbolic than effective measure; especially in a global scenario that expects a rising greenback, if the inflation data from the United States supports.
Source: Ambito
