Would it be possible to have a dollar again at 4,000 pesos or less?

He American dollar It has been the protagonist of the foreign exchange market in the world, but this time it has been due to the vertiginous fall in its price.

At the end of the second week of April, the benchmark currency in the world market has been losing ground not only against other highly-strength currencies such as the euro or the yuanbut also with respect to the currencies of emerging countriesamong these, the Colombian peso.

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And it is that between April 10 and 14, the dollar closed the week worth 145 pesos less than how it started, which raised questions about the possibility of whether it will be possible for the currency continues in its free fall and reaches 4,000 pesos or less.

However, this would be unlikely, in principle because the dollar, being a currency of a nation with an economy as developed as the United States, can have several resistances.slowing down its fall, or generating a ‘rebound effect’ when reaching the lowest possible price.

(Dollar in Colombia lost 145 pesos in the week).

“It is very unlikely, because the dollar has very low resistance. Its next resistance would be the barrier of 4,200 pesos, in which it usually tends to bounce. At this time, it exceeded its previous minimum, which was 4,457 pesoss”, explained Óscar Cardozo, economist and analyst at Banca de Inversión Valúes AAA.

In issues concerning the Colombian economy in a unique way, the behavior of the dollar can be related to the expectations that have arisen around the package of reforms (labor, pension and health) presented by the Government, as explained by Hernando Zuleta, professor at the Faculty of Economics at the Universidad de los Andes.

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“We will not see the dollar below 4,000 pesos, at least for the next few months. There is an element of uncertainty and it is not known what is going to happen with the reforms of the Government, so that uncertainty is partially transferred to a higher dollar”, Zuleta mentioned.

However, the financial situation that the United States is going through must also be taken into account, country that is still overcoming a banking crisis, a situation that has not occurred since 2008.

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“Dollar declines depend on expectations regarding domestic versus foreign interest rates, as well as expectations regarding the price of oil. There will be no changes in the same direction in the futureadded the professor.

Therefore, as the experts explain, it is very unlikely that the dollar will end up fluctuating at 4 thousand pesos, This is because there would be a rebound effect that could boost the US currency against the peso.

“If the dollar were to fall, given the macroeconomic conditions, it is most likely that it would reach the barrier of 4,200 pesos. Hence, possibly, it will have an upward trend again or remain at low levels. It is unlikely that the dollar will be above 4 thousandCardozo added.

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