Blue dollar and financials: the keys that pressure prices and the political risks that must be looked at

Although he Dolar blue It comes down this week and drops $30 in two days. Analysts expect February to be loaded with pressure on financial dollars due to different factors: the main one, the political risk to which the Government is exposed in the treatment of the omnibus law in Congress. This, added to a crawling peg that falls short while inflation does not slow down and negative rates are key elements, according to analysts.

At the outset, it must be said that the market sees “weakness“in the Executive after the withdrawal of the fiscal package, as well as contradictions in their own projections, since the consulting firms assume that it will not be possible to compensate for what was taken and the primary surplus will be around 1% of the Gross Domestic Product (GDP), which implies a total deficit of just over 1%.

This, added to a crawling peg that falls short and encourages that, as long as inflation does not decrease, a further jump in the exchange rate is needed. While the futures market is betting on a slow devaluation in February, which would accelerate in March and go all the way in April.

Another factor that adds pressure is negative rates, which allows the Central Bank (BCRA) to continue liquefying its liabilities but at the cost of maintaining a high gap. Thus, it is expected that the tense calm that the square is experiencing these days encounter some stress during the second month of the year.

In the City, the expectation is focused on the treatment of omnibus lawwhich strictly speaking leaves room for volatility in the different exchange rates, in a context marked by the appearance on the horizon of certain latent risks that could threaten the viability of the current scheme.

For example, the progressive growth in the demand for foreign currency by importers will impose limits on purchases of the central bank (BCRA) in the Single and Free Exchange Market (MULC), and could even reverse your balance. From Personal Investment Portfolio They maintain that “there is room for the volatility of the CCL to be maintained in a context of very negative rates in pesos.”

And he adds that, additionally, we are entering the period of sharp seasonal decline in the demand for money. After the seasonal peak of December and January, “in February the demand for pesos usually exhibits its largest monthly reduction of the year, which could be enhanced by such a negative real rate“says the brokerage house. Let’s see what the analysts consulted by Ambit.

Global dollar on the rise, bad news for Argentina

As well explained Martin PoloCohen strategist, what could add volatility to financial dollars these days comes from the global context in which the dollar in the world “is appreciating against all currencies and obviously that is bad news for Argentina.”

Another factor that Polo influences is the drop in the prices of agricultural raw materials, which translates into a lower income of foreign currency to a country that needs dollars. And on the other hand, also in the inflation data corresponding to the month of January.

For Polo, if they come above or below the estimate there may be some pressure, basically because ultimately what you are going to see is “what is the speed of fall of the real exchange rate“On the other hand, there is the so-called tenders of the BOPREAL for the second series, recalls the analyst.

Along the same lines, he points Alejandro Giacoiaeconomist at Econviews, who indicates that February is a month where the demand for money is low, which can be a factor of pressure on investors. parallel dollars. Which adds to the fact that “the real interest rate is very negative.” This, the analyst explains, on the one hand, serves to continue liquefying the BCRA’s liabilities.but it also works against sustaining the demand for pesos.

Giacoia outlines as additional points the discussion in Congress and “whether the Government is capable of implementing the fiscal reforms necessary to eliminate the deficit“Although he says that we will also have to pay attention to the upcoming BOPREAL tenders.

Inflation: the data marks the exchange market

Lucio Garay Mendezfrom EcoGo, analyzes that the inflation data for the first week of February “will be crucial“This is because, if it exceeds expectations, you will see a slower slowdown,”which could reduce the demand for pesos and generate pressure in the parallel exchange market“.

Like the other analysts, Garay Méndez maintains that, in a context of very negative real rates, “Uncertainty increases and the possibility of the exchange gap widening increases.”“. In addition, the monetary regulator’s purchases in MULC are key, “especially in February, with increasing pressure from importers, which could complicate the accumulation of reserves“. Since the perception of a weak BCRA favors volatility in the currency markets.

Thus, analysts anticipate a context “very unstable“And, as he explains Andrés Reschini, of F2 Soluciones Financieras, “there are still many imbalances to be solved and everything that the market may perceive as a deepening of these imbalances is going to increase the pressure” on the Dollars free.

For Reschini, there are several factors that could have an influence on closely linked exchange rates. to the muscle of the Government to generate profound changes, such as Bases law, the DNU and other projects and initiatives promoted by the Executive.

Reschini adds that other factors, such as the severity of the damage from the heat waveinflation that does not slow down and a fiscal result that is lower than expected, “would be possible triggers of pressure”, which, of course, are added to the external factors and those outlined in these lines.