He global dollar hit a new five-month high amid an uncertain geopolitical context that positively influences the foreign exchange market of Uruguay, that is beginning to get excited about a consistent upward trend.
He dollar hit a five-month high on Tuesday after retail sales in USA They turned out to be above what economic analysts expected: instead of the projected 0.3% growth, records noted an increase of 0.7% in March. Thus, the dollar index advanced 0.04%, to 106.23 units, after reaching its highest level since November 2.
This underpinned the increasingly widespread belief that the Federal Reserve (Fed) will not rush to move forward with the first cut in reference interest rates, which are at their highest historical range.
The main reason for this is that greater consumption can lead to higher inflation or, at least, make it difficult to stabilize it in numbers closer to the 2% sought by the US central bank. Therefore, this being the main objective of the Fed, the possibility that the first rate cut will occur in September is increasing; so he dollar remains strong, supported by investors who are betting on continuing to obtain good returns on their placements in this currency.
“The US economy continues to grow very solidly, above the long-term trend, which supports the rise in bond yields and discourages the Fed cut rates,” he stated in this sense Kenneth Broux, of Société Générale, to the Reuters agency.
Meanwhile, the words that the president of the Fed, Jerome Powell, They will be decisive in continuing to drive the projections of market operators towards a late cut – and less than expected at the beginning of 2024 – in rates.
In Uruguay the dollar is excited about an upward trend
For his part, the dollar in Uruguay chained its fourth day on the rise and closed on Monday with a rise of 0.27% and on the verge of returning to the range of 39 pesos: according to official data from the Central Bank (BCU)the US currency was quoted at 38,891 pesos.
In this way, so far in April the greenback has accumulated a monthly increase of 3.57%, although it still has a depreciation of 0.34% for the year. However, recent movements suggest that, at least, it could recover the value lost during 2024 this month, also getting closer to the expectations of economic agents and, at least, a little closer to what export sectors of the type expect. exchange.
This positive behavior of the local dollar responds, mostly, to the momentum of the currency at a global level; although it is still expected to observe the possible effect that the decrease in Monetary Policy Rate (MPR) that the BCU made official last week may have on the price of the currency. In any case, eyes are on the conflict in Middle East, and how an eventual rise in oil prices could affect inflation levels and, therefore, the monetary policy flexibility to take action regarding exchange delay which is still a reality.
Source: Ambito
