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Saturday, March 25, 2023

The dollar strengthens in the region after greening expectations of rate hikes in the US

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Last Wednesday, the Fed had raised interest rates 25 basis points and said it had reached a turning point in the fight against inflation, which led investors to assess a slowdown in the pace of future rate hikes.

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However, a surprising US nonfarm payrolls number on Friday, coupled with a rebound in the service industry in January, sent the dollar to a high not seen since mid-January, with investors estimating that the benchmark rate of the Federal Reserve will peak at 5.1% in June.

Losses were led by the Colombian peso, which depreciated 1.5% at 4,768.80 units per dollar, its weakest level since January 10; while on the stock market the MSCI COLCAP stock index fell 0.5%, to 1,257.32 points.

The Chilean peso lost 1.2%, at 803.50/803.80 per dollar. Meanwhile, the leading index of the Santiago Stock Exchange, the IPSA, gained 0.1%, to 5,322.15 units.

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The Mexican peso traded at 19.1224 units per dollar in foreign operations, with a retracement of 0.9% compared to Friday’s close.

The Brazilian real depreciated 0.8%, to 5.1901 units per dollar, while the Bovespa index on the B3 stock exchange in Sao Paulo fell 0.5% to 108,005.93 points.

In Argentina, the peso fell 0.6%to 189.10 per dollar in depreciation regulated by the central bank, while the Merval stock index rose 0.32%, to 240,153.20 units, in a selective market of operations and led by the improvement in energy shares.

“The good forecasts for the oil sector with Vaca Muerta at the helm keep YPF shares on their bullish path,” said a trader.

The Peruvian currency, the sol, depreciated 0.4% at 3.84/3.855 units per dollar. Meanwhile, the benchmark of the Lima Stock Exchange lost 0.3% to 574.66 points.

Source: Ambito

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