The blue dollar registered a downward trend in the last round of May, while the dollar Cash With Settlement and MEPended with strong increases despite the positive climate in the market due to the Senate’s ruling on the Bases law and the fiscal package. Free dollars woke up in May of the stability of the previous four months after the last rate reduction and a lower liquidation of exporters. So, They beat inflation for the first time this year, and some analysts predict that this will happen again in June.
He Dolar blue closed May in $1,225With which in the month it rose $185 or 17.78%with which it largely beat the performance of the traditional fixed term, which until the rate reduction ordered on May 14 by the BCRA was around 3.3% and is now around 2.5% monthly given that the majority of banks offer 30% annually
For his part, the CCLwhich is what companies use to transfer foreign currency abroad, ended May in $1,247.42 With which rose 14.4% in the month, Meanwhile he MEP He finished in $1,215.93 with a monthly increase of 2.8%.
Experts suggested that the blue dollar and financial currencies overheated in May for several reasons: the drop in rates that led to the dismantling of carry trade positions, the perception of a delay in both the official exchange rate and the financial ones against to the evolution of inflation, and a slow pace of liquidation of agriculture. And to that was added the uncertainty due to the delay in the approval of the Bases Law.
In that framework, the Analysts predict that in June there may be some stability, especially in the first fortnight that is seasonally demanding of pesos, for payment of bonuses and at the end of the month of taxes on Income and Personal Assets, but they affirm that there are several other factors that are key and They will influence the course, among them, the liquidation of the gross harvest, and that there is no setback in the approval of the Base Law and the fiscal package.
Parallel dollars: what value do you expect in June?
The financial analyst Gustavo Ber evaluated that beyond the delay that occurred in May with the thick harvest “in the expectation of a greater liquidation of the field, I estimate that the financial dollars and free “They could go through a stage of greater stability around $1,200.”
The blue dollar closed May at $1,225, which implies a monthly increase of $185, or 17.78%
With the same diagnosis, Maximiliano Ramirezan economist at the consulting firm Suramericana Visión, said that “it is possible that financial dollars will remain at a calm pace between $1,200 and $1,250 taking into account that there will be liquidation and that will generate supply in that segment (through the blend dollar)”.
With the same look, the operator Gustavo Quintanafrom Pr Cambios maintained that “The first fortnight of the month always presents a panorama of greater demand for pesos, which is why I would not expect a significant increase of the quotes, I have the feeling they will remain in the current range.” In relation to financial dollars, the analyst pointed out that “June is presented as a month with improvements in the income of exporters due to the acceleration of the thick harvest , and on that side, additional pressures could not be expected, especially taking into account the persistence of the blend dollar to liquidate exports.”
In any case, Quintana maintained that “The second fortnight may present a different panorama, taking into account the reflux of pesos and a probable drop in interest rates” and estimated that “in that scenario, prices should be set at a range between $1,200 and $1,250.
For its part, Pablo Repettohead of Research at Aurum Valores, alleged that in June “Tax issues and demand for payment of bonuses may have some effect that helps lower the demand for the dollar but at today’s prices, supply and demand should be quite balanced.”
“The range of financial dollars should be between $1,175 and $1,325, $1,250 being a reasonable price” although he warned that “if the government begins to spend more due to the delay in rate adjustments and persists in lowering the rate there could be additional pressure on the dollar.”
On the other hand, the economist Natalia MotyHe predicted that “In June the dollars will push upwards, settling between $1,300 and $1,350 due to a greater demand for dollars resulting from a widening of the gap in the last days of May, and a clear sign that the crawl rate peg at 2% is unsustainable, which at some point will force it to be accelerated or to carry out a new devaluation”.
The fA good crop settlement flow is key to the direction of the dollar Cashed with Settlement by the offer through the blend dollar
In tune, the financial analyst Christian Butler believes that parallel dollars will have a “bullish trend, although nothing uncontrolled, and they will beat inflation again”
“Parallel dollars are going to continue in this bullish trend and June will probably be another month where they are above inflationto recover the lost ground, because they are still cheap, and the rate is strongly negative, and the market put a limit on that decline,” he argued.
Likewise, the expert alleges that “the liquidation of the harvest plays in two ways, on the one hand it is favorable because you can accumulate more dollars, but the counterpart is more pesos, and the producer with those pesos, since you have a trap, will end up going to the market financial, to the MEP or CCL, because with a negative rate they have less incentive to keep the pesos”
In this context, Buteler estimated that the floor of parallel dollars is $1,200 and projected that during June they can reach $1,300and at the end of the month they will probably be a little higher.”
Parallel dollars: what are the risk factors?
Ber He warned that the factor that could alter free dollars is a setback “in the Bases Law and fiscal package, they continue to be at the center of the scene” and noted that the market will also monitor “relevant economic variables such as the dynamics of inflation, “if there will be a new cut in the rate, and the continuity of the fiscal surplus.”
The analyst predicted that If the Law is approved “without too many additional relevant modifications, the dollars could weaken to the $1,150 area, while if “if it is rejected by the Senate, they could retest levels of $1,300”.
Analysts warn that if there is a new rate cut in June it will put pressure on parallel dollars
For the economist Federico Glustein If the Base Law is not approved, “the floor of the blue dollar and MEP is $1,200 with a ceiling of $1,260, and in the case of the CCL that range will be $1,240 and $1,300.” But he projected that If the rule is sanctioned, “the MEP and the blue could drop to a level of between $1,150 and $1,220, and the CCL to a value between $1,180 and $1,240.”
The strategy team Bridge pointed out that “The keys are the approval of the Base Law and the fiscal package in Congress, and the end or not of the 80/20 blend dollar at the end of June, as initially planned”. And he stated that “if the blend is eliminated, this would put temporary pressure on the parallels and the gap.” And he maintained that “the other key and more fundamental factor is the fiscal, and specifically the size of the fiscal deficit that is expected for June, which will mean a monetary expansion for fiscal reasons, although it is also important to remember that this coincides with a seasonal increase in the demand for money, so what matters here is rather the order of magnitude.”
At the same time, Motyl He assured that a “relevant factor that worries the market is what happens with the swap with China” whether it is renewed or not given that US$2.9 billion expires in June. “There is uncertainty about whether Argentina will have to pay it or if it will be able to renew it. “This issue will definitely change the dynamics of the foreign exchange market in the coming weeks.”he asserted.
And he considered that “other factors that will be key and will mark the dynamics of financial dollars and blue in June will be the approval of the Base Law, and the inflationary expectations, “especially in June and July, which will be the most complicated months, and if the slowdown trend is reversed, greater uncertainty will most likely be generated in the exchange market.”
In addition, the economist argued that “the Base Law is fundamental to determine the stability of the exchange market, this is because it will determine the success or failure of the reforms.” In this context, she argued: “I do not believe that the approval of the Bases Law will generate a fall in dollars, but it could stabilize them and eliminate the volatility that has occurred in recent days.” But he predicted that If the law is not approved, financial dollars could exceed $1,400 due to a worsening crisis of confidence and an increase in demand for dollars”.
Butler He agreed that a possible non-renewal of the swap with China “would be a headache that will put upward pressure on prices because there are fewer dollars that you will have left.” And he stressed that other variables that can affect the direction of the dollars and that investors will follow with a magnifying glass are: “the fiscal result, which is not all due to the COUNTRY tax, and if the decrease in spending is the product of a blender or chainsaw, because “The market is increasingly accepting the blender less and less. And the inflation figure, given that although May may be a good number, in June there could be a rebound compared to the announced increases, and that does not help the dollar to remain calm.” .
Likewise, the consultant 1816 He highlighted that “in view of the debate in particular (of the Bases Law) in the Senate it will be very relevant if any issue, such as, for example, the Income Tax ends up being rejected by two thirds of the senators because in that case Deputies only “It could return to the original wording with two-thirds, and given that Unión por la Patria and the left have more than 40% of the deputies, it can be completely ruled out that the ruling party will obtain that majority.”
