Global economic fear leads the dollar to a maximum of $4,198.77

Global economic fear leads the dollar to a maximum of $4,198.77

The fear of a possible global economic recession that is being seen, preceded by high inflation and increases in interest rates, once again boosted the dollar to historic levels in some countries, including Colombia, where the Representative Market Rate reached $4,198.77, which represented an increase of $47.

(Read: ‘Top’: highest prices that the dollar has had in Colombia).

Yesterday the currency in the banking market closed at $4,205.05 after having opened the operations at $4,174.98 and record an average rate of $4,198.78.

The minimum price of the dollar in Colombia was $4,174, while the maximum touched $4,209a rate so high that it had not been seen since the start of the pandemic.
Analysts considered the aforementioned international factors, the 150 basis point increase in the Banco de la República’s reference rate and the internal situation, as the main element that pushed the currency up.

For Diego Rodríguez, financial analyst and Managing Director of Bosk Capital, “a large percentage is due to the devaluation of Latin American currencies such as the Brazilian real and the Mexican and Chilean pesos. All have lost value due to the strength of the dollar at a global level, which given the cycle of upward rates by the Fed and the risks of recession in Europe and the United States, is gaining value. Even treasury bonds traded below 3% again”.

For Rodríguez, the international scene is amplified by the local political factor. But the dollar’s rise this week is mostly the effect of the fear of a possible global recession.

“The decision is compatible with the strength that economic activity has been showing in recent quarters and will help to position monetary policy more quickly on a path that reduces inflation,” was one of the justifications of the Board of Directors of the Bank of the Republic for the increase in rates.

Certified financial and stock market analyst Andrés Moreno Jaramillo said that the Fed would surely will raise interest rates another 75 basis points in July and a similar decision is expected from the European Central Bank and, in this sense, many investors prefer to take their resources to those countries, safer and expecting higher returns.

In addition, he said, internally “many investors do not want to invest and, instead, they do want to take their resources out of the country.”

oil goes up

For their part, international oil prices rose yesterday supported by the prospect of a long holiday weekend in the United States and production cuts in Libya.

The barrel of Brent del Mar crude for delivery in September, in its debut as a reference contract, ended with rise of 2.38% quoted at US$111.63 dollars in the London market. On its side, in New York, the barrel of WTI for delivery in August rose 2.52% to 108.43 dollars, according to the AFP report.

“In general, before a three-day weekend in the United States, barring unforeseen events, there is nothing negative that could affect crude oil prices,” said James Williams, of WTRG Economics, referring to the July 4 holiday, in the which produces the largest vacation departures of the year.

The American Automobile Association (AAA) estimates that nearly 48 million people commute by car or plane, an increase of 3.7% from 2021 and close to the pre-pandemic level.

(Also: Price of gasoline and diesel rises 150 pesos from this July 2).

This perspective due to a greater demand for fuel, sustained prices.
Likewise, the oil market did not expect a relief from the supply of the Organization of Petroleum Exporting Countries (Opec) and its partners (Opec +).


Source link