That of April 20 was the fifth consecutive rise in the price of the dollar in Colombia (accumulating $112), after having reached the minimum level of the year of $4,424.02but what analysts agree is that the market is now waiting for the decision of the Federal Reserve (Fed) on rates at the beginning of May.
The market expects, according to the Economic Expectations Survey among analysts, carried out by the Bank of the Republicwhich in the entire fourth month of the year stands at $4,517 on average.
(Argentina’s central bank raised the interest rate to 81%).
By the end of this year, according to the forecasts contained in the survey, it is expected to be located at $4,630. In the case of 2024, the projection is that it will drop to $4,550.
According to the analyst Diego Rodríguez, managing director of Bosk CapitalOn the fundamentals side, the recent behavior of the currency worldwide has to do with the announcements by various members of the Fed in the sense that rates must continue to be increased and that caused the currency to stop falling further. as in the previous weeks. Of all, he assured that the price of oil also fell and that affects the US currency somewhat.
Regarding the technical elements, Rodríguez explained that the dollar has been falling since it hit $5,100 in November 2022 and which had been rising from $3,700 in June, that is, an increase of almost $1,400.
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In this sense, the market corrected to close to $4,600 and then it bounced back to $4,800 which has now become the intermediate high.
Subsequently, with the drop in inflation in USA it accelerated its fall to a little more than $4,400, a figure that is the minimum of the year.
In these four months of the year, the market has recorded two bearish movements in January, March and April and has achieved broader lows, but when it bounced in February the market didn’t go as far as $4,800.
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The managing director of Bosk Capital said that today a lot of trading It is done with technical patterns and depending on the decision made by the US central bank, the currency could consolidate further gains or even continue to fall below $4,400.
According to an analysis of Bancolombiathe evolution of prices, the current situation of the banking sector at a global level and the expectations regarding the movements of the Fed in the US will be key in the dynamics of the dollar-peso in the coming months.
In fact, the rebound in the core component of inflation in the US casts doubt on the speed of price convergence, in such a way that it would reduce market optimism about a rate cut in the second half of 2023.
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For Bancolombia, in this challenging context, “we maintain an exchange rate vision close to $4,690 towards the end of the year. Likewise, for the second quarter we expect an average exchange rate of around $4,720”.
Last Thursday, in a day characterized by high volatility, the dollar in the Colombian banking market presented a difference of $8.1 pesos below the closing of the previous session to end at $4,524.90.
Bancolombia assured that taking into account the virtual stability of the currency between Wednesday and Thursday, the market continued to operate with a slight positive bias against the data about the weakening of the US economy much mores challenging than expected by analysts and its effect on core inflation.
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This occurred, the entity said, as a result of an increase in requests for unemployment benefits to 245,000, a decrease in second-hand home sales and a significant deterioration in manufacturing activity.
The index DXYwhich measures the dollar against the six strongest currencies in the world, it weakened against its main peers and gold once again exceeded US$2,000 gaining more and more relevance as a safe haven asset.
Thanks to the above, the main currencies of the region strengthened, where the Colombian peso appreciated 0.18%.
Likewise, during the day transactions were made for USD1,377.10 million and the pair exhibited an average price of $4,535.83.
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