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The global dollar is strengthening, contrary to the local exchange market

The global dollar is strengthening, contrary to the local exchange market

He global dollar recovered in the early hours of Wednesday and before the United States Federal Reserve (Fed) publish the minutes of the last meeting of Federal Open Market Committee (FOMC), with traders awaiting new signs of possible cuts in benchmark interest rates. In Uruguay, Meanwhile, the currency fell again and accumulated three negative days.

With the data of inflation Last week, investors had reinforced their bets on an upcoming rate cut by the Fed, so he dollar had been impacted, falling to five-week lows last Thursday. However, as the days went by, waiting for the minutes and appeased by comments from the US central bank authorities, expectations moderated and the greenback recovered some of the lost value.

Thus, the dollar index —which compares the currency against six other currencies of international relevance— rose 0.26% and stood at 104.91 units, touching the highest value in a week.

For his part, the governor of the Fed, Christopher Waller, He said Tuesday that he would need to see several more months of good inflation data before he would feel comfortable supporting rate cuts. The president of the Federal Reserve of Cleveland, Loretta Mester, echoed the same opinion.

As he considered Joshua Mahony chief market analyst Scope Markets, In dialogue with Reuters agency, “today’s minutes from the Federal Open Market Committee (FOMC) will offer a key insight into the ideas of the Federal Reserve at the beginning of the month, and traders are eager to gauge whether the September cut currently being considered seems likely or not.

While markets remain hopeful that US inflation will continue to cool, data from the PCE which will be published on May 31 will be a crucial test, according to analysts.

Negative streak in Uruguay

In the local market, unlike what happens globally, the dollar is going through a—still—short negative streak: with the 0.32% decline on Tuesday, the currency fell to 38.285 pesos, according to the official price of the Central Bank of Uruguay (BCU); thus approaching once again the range of 37 pesos.

With this setback, the US currency entered slightly negative territory so far this month, with a depreciation of 0.06%, reaching values ​​it had not reached since last Monday the 6th, when it closed at 38,353 pesos. Meanwhile, the decline in dollar if compared to the end of 2023, reaching 1.89%.

In turn, the price moved away from the value expected by economic agents. Anyway, according to the last Economic Expectations Survey (EEE) of the BCU, the market believe that he dollar can cut a good part of the exchange rate delay: although they moderated the average value for the end of the year by 30 cents, they believe that the currency will end 2024 at 40.05 pesos. By the end of this month, meanwhile, they expect an exchange rate of 38.50 pesos.

Source: Ambito

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