The high volatility of the dollar persists: its price exceeds $4,100 this Wednesday

After having been the strongest currency in Latin America at the start of the year, the Colombian peso became, a few weeks ago, one of those that lost the most against the dollar. Currently, high volatility sets the trend in the local market.

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According to the Colombian Stock Exchange, the dollar closed this Wednesday, June 26, at a average price of $4,133, that is, it rose 40 pesos compared to the TRM of the day, which was $4,093 and once again surpassed the $4,100 barrier, which had broken downwards in the previous session.

This highly volatile behavior is a reflection of the trend that has prevailed in recent days, which raises the question of Where is the dollar going?

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According to Laura Sophia Fajardo Rojas, analyst at Economic Research Acciones & Valores, the volatility of the exchange rate is tied to local and external factors, amidst uncertainty.

According to Fajardo, the delay in the rate cut in the United States and the news of whether the Bank of the Republic of Colombia continues its cycle of monetary policy easing will be the main drivers of the movement of the foreign currency in the coming sessions.

Also, it will be important to see the evolution of the trade balance deficit, which has been increasing, and if the ban on coal exports to Israel is consolidated, since it could stop the entry of these currencies into the country.

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“What does this mean? That in the short term, in the best of cases in which the political risk and the fiscal panorama on the local and international fronts are mitigated, the trade balance deficit remains limited and oil continues rising, the dollar could go to levels close to $3,900; while in the event that the markets continue to be more nervous we could see levels close to, or even above, $4,280,” Fajardo said.

In the medium term, the analyst warns, the presidential elections in the United States and, as has been usual, the rating updates by the risk rating agencies, will give clues about the direction that the Colombian peso will take.

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