The causes of the jump in the dollar: transient factors or volatility to stay?

The dollar extended its upward trend at the beginning of this new week, by climbing almost 8% since the end of last month and at Banco Nación touched the $ 1,300. While some specialists consider that overheating is due to specific facts of the situationothers see that the sum of factors and some Structural imbalances They do not ensure calm in the exchange market for the next days.

It is difficult to mark a single “driver” that is promoting the price of “green ticket”. The dollarization of bonuses, the surplus of weights that remained in circulation after tenders from the Ministry of Economy, the purchase of reserves by the Treasury, the expectation of a lower supply of agriculture and suggestion of the JP Morgan to abandon the strategies of “Carry Trade” were some of the causes that appeared in the analysis of the economists.

“My perception is that today the YPF theme hit the dollar. Prices accelerated the rise after knowing the new decision of the US justice. Until that time, the development of the wheel was quiet, with moderate climbing. We will see in the next few days the rise is corrected or if we are in the presence of a new floor, “the change operator said in dialogue Gustavo Quintana.

On this day, the official wholesale exchange rate advanced $ 18.50 (+1.5%), for which Since June 27, its accumulated increase is already $ 91 (+7.7%). In this way, the price is strengthened above the center of the flotation bands set by the Government, and presses on the parallels, leading to the gap with the Blue at its highest level in almost three months.

In the market they see that the dollar climbing can be extended

With a look somewhat different from that of Quintana, the liberal economist Roberto Cachanosky expressed to this medium that The dollar rises because “because the circulating of pesos grows and there is stock of Carry Trade to disarm.” “The investor prefers to wait for the elections positioned in dollars. I think it can still continue the rise a little more, especially after the elections, unless the government intervenes strong in the futures market,”he deepened.

Regarding the latter, a report of PPI He pointed out that the intervention of the Central Bank (BCRA) in futures, mainly in the shortest contracts, was accentuated at the end of last week. In parallel, the stock market society continued to ask why the demand for dollars is generating an upward trend in the price, despite the fact that the agriculture liquidated in this beginning of July at a rate not seen from the ‘Soya Dollar’ programs.

In that sense, the entity suggested first that “Producers could be buying official dollar and exporters financial dollars with what was liquidated by the MULC. “In addition, he highlighted the relevance of the seasonality in energy importsdespite the annual reduction by the Boom of Vaca Muerta, the “Typical pre -election dollarization” and the “Carry Trade” positions closurein a context in which “the expiration of the Lefis and the consequent reconfiguration of the interest rates scheme resulted in strong casualties of rates, giving attractiveness related to the dollar.”

All this happens in a scenario of exchange delay and commercial opening that accelerates imports of goods and services. Punctually this is notorious in the Tourism sector, where a strong increase in “deficit” is expected for the coming weeks for winter holidays.

“Having advanced liquidation due to the decrease in transient withholdings, it is very possible that it slows down more than one would foresee for the typical seasonality. This will be given in a framework in which it is expected that both factors of the current account (seasonality of foreign trade and tourism) and of the financial account (portfolio dollarization) conspire against the exchange rate. It seems that the volatility in the exchange market arrives to stay“Ppi predicted.