:quality(85)//cloudfront-us-east-1.images.arcpublishing.com/infobae/BHJAPAW26VEPJI26RW2FAMFF7U.jpg "The dollar fell again and closed below $4,900 1")
The price of the dollar fell again and was below $4,900 on February 23. By the end of the day, it was trading on average at $4,853.99, which was down $70.92 from the Market representative rate (TRM)which today stood at $4,924.91.
The dollar closes at $4,924.77 in a lower session despite the uptrend
Price moderation and expectations of Fed moves in the U.S. will be key to the dynamics of the dollar
The day started with the US currency at $4,902, its record high was $4,908, while the low was $4,833. According to the Set-FX platform, on Thursday, February 23, over $1.47 billion was traded in 1,739 trades.
Adding the Feb. 22 drop ($25.56) to today’s drop, the dollar is down nearly $100 in two days. Given this, Juan Eduardo Nates, senior foreign exchange partner at Credicorp Capital, warned, quoted in crushthat the volatility of the price of the dollar in Colombia continues to be affected by the measures adopted by the Federal Reserve (FED).
“The market reacts to the minutes of the Fed. It has been somewhat confirmed that agents are already seeing that for January, an increase of just 25 basis points was sufficient. Given the conditions of employment and the economy, of growth a little above expectations, several members of the Fed believe that for the next meeting, at the end of March, they should raise 50 basis points.
A similar panorama is seen from the Direction of economic, sectoral and market studies of Bancolombiafor whom the moderation of prices and anticipations on the movements of the FED in the United States will be decisive for the dynamics of the dollar and the peso in the months to come.
“If the inflation consolidates a consistent convergence sends, has menos necessities of increasing the interests of the federal funds, that ahondaría in ones perspectives of recortes of theses during el 2S23, contexto that sería coherent con un escenario de relativa fortaleza de la dollar-peso relationship, lo that permitiría maintain una visión de tasa de cambio cercana a los $4,700 hacia el cierre del año”, indicaron desde la entidad, que también anotaron que para el first quarter de 2023 se espera una tasa de cambio average en torno to $4,750.
On the basis that the dollar fell in the February 22-23 sessions, Nates pointed out that “part of the reaction yesterday was to take into account that the agents are already discounting, the market is already discounting this expectation of 5 % as the maximum rate, at 5.5% as the maximum rate The reaction has not been as aggressive In the case of the Colombian peso, we have already experienced a lag of peso weakness We see a peso that suffered yesterday a correction down to $4,900; We continue in that range we saw this week.
The dollar continues its upward trend and continues above $4,900
On the day of February 21, the US currency had a record high of $4,978.50, according to the Set-FX platform.
Felipe Campos, director of investments and strategy at Alianza Valores y Fiduciaria, pointed out on Twitter that the behavior of the dollar can be explained by the negotiations on public debt securities (TES)
“Foreigners appeared in the TES market yesterday and they continue to become a key (not the only) element in the behavior of the dollar. Last week they sold 1 BN in a single day (daily high) and yesterday they bought half of it. Last time they appeared they lowered it from $5000 to $4500,” he wrote on Twitter.
Campos also said: “Personally, I am concerned about two additional shocks: a resumption of the international crisis and the announcement of retirement. But the dollar can make several times 4,500 and 5,000 (range proposed by Alianza Valores for this semester) before arriving”.
The ace economic figures of the first two months of the year have not been the most positive for the country. There inflation continued to rise, in fact, hit all-time highs, interest rates set by the Bank of the Republic they continued to rise and, in general, price increases continued. Although there are several factors that determine this economic condition, in the financial opinion survey, presented by the Economic and Social Research Center of Fedesarrolloensure market uncertainty occurs due to conditions sociopolitical that crosses the country.
The price of the dollar closed at $4,919.42: it rose by more than $100 in one week
So far in February, the Colombian peso is the third currency in the world that has lost the most value against the dollar (-5.14%). Its fall is exceeded only by the Lebanese pound (which lost 89.91%) and the Russian ruble (-6.09%)
Within the survey Fedesarrollo, analysts believe that socio-political conditions seem to be the main factor when it comes to investing. There are other situations such as fiscal policy and security:
“Socio-political conditions were the most relevant aspect of investing, being chosen by 44.4% of analysts (vs. 19.4% the previous month). Monetary policy comes second with 18.5% participation (vs. 22.6% the previous month). They are followed in order by economic growth and other factors with 11.1% of the share (against 22.6% and 9.7% respectively the previous month). For their part, the external factors went from 6.5% to 7.4% and the budgetary policy clearly decreased its relevance, going from 19.4% the previous month to 7.4% this month. As in the previous measure, the security conditions are not a relevant factor for making investment decisions”, they detail from Fedesarrollo.
The study center also announced an improvement in the business confidence index, which reached 29.7 percent, representing an increase of 7.2 percentage points from last month.