He dollar was trading steady on Monday, as investors embraced the idea that U.S. inflation may have slowed enough for the Federal Reserve (Fed) cut out the interest rates in 2024; Meanwhile, the US currency in the Uruguay accumulated an increase for the second consecutive month.
According to data published this Friday, it was shown that the inflation Consumption experienced a modest increase in April and that price pressures remained above the 2% target set by the US central bank. Operators rate the possibility of a rate cut in September at 60%, compared to 49% before the report.
“This is a mega week for financial markets,” he said. Kathleen Brooks, from the firm XTB, citing the ECB’s rate decision and the Mexican elections as factors. He dollar recorded its first monthly decline of the year in May, weighed down by changing expectations about when and how much the Fed will lower rates.
Global Dollar Index
Meanwhile, the dollar index, which compares the greenback with a basket of six major currencies, gained 0.1%, to 104.67 units. The index declined 1.56% in May, but has accumulated an advance of 3% so far this year.
The pound sterling fell 0.2%, to $1.2715, while the euro fell 0.12%, to $1.0834, pending the monetary policy meeting of the ECB on Thursday, in which a rate cut is considered almost certain to be approved.
He dollar It lost 0.26% against the yen, at 156.82 units, moving further away from the four-week low reached last week, at 157.715. The Japanese currency is by far the worst performing currency against the dollar this year, with a 10% loss in value.
Among emerging market currencies, the Indian rupee rose and the Mexican peso declined following the exit results of general elections in both countries.
Two months on the rise for the dollar in Uruguay
He dollar closed May with a monthly increase of 1.24% and has accumulated two months of growth, after having improved 2.04% in April, with a current value of 38,792 pesos, which is its maximum in a month and a half, according to the data from Central Bank of Uruguay (BCU).
However, the US currency still has not reached the range of 39 pesos and remains far from the value expected by the market, to the point that its 2024 limit was at the beginning of the year, when on January 9 it was quoted at 39,439 pesos.
Thus, in case the dollar continue with the positive monthly trend, it must appreciate 1.64% this month to reach its maximum of the year. In contrast, the greenback It is 3.43% above its lowest closing level, which was on March 26, when it was worth 37,507 pesos.
At a time when the discussion on the exchange delay by different sectors, the dollar accumulates a decrease of 0.59% so far this year, driven mainly by the low performance in March, when the currency operated with a drop of 3.83%. Meanwhile, the variations in February and January were slight, with a decrease of 0.30% and an increase of 0.36%, respectively.
The delay in exchange rate It is close to 15%, according to BCU calculations, and several areas presented their proposals to improve the situation. Although the system of free floating is generally appreciated, from different areas they demand that the government grant compensations.
Source: Ambito
