The dollar continues to show a high dependence on the decisions made by the Fed regarding its interest rates.
Photo: Bloomberg – Andrew Harrer
The dollar closed this Tuesday close to $4,000. This Tuesday’s quote It remained at $3,994.77, which represented an increase of $50 compared to the Representative Market Rate (TRM), which for the day was $3,944.14.
The dollar started its quote on Wednesday with a drop that left it at $3,930.00. This translates into a reduction of $35.96 compared to yesterday’s opening, as well as a change of 0.12%.
On the other hand, the minimum transaction price stands at $3,921 and a maximum of $3,997.
For this week, the event that will most influence the price of the dollar will be the decision on interest rates announced by the Federal Reserve, which will meet starting this Tuesday and will announce what it will do with interest rates this Wednesday.
Analysts agree that the main variable that continues to pressure the price of the dollar is the decisions of the Fed around interest rates. These, it must be remembered, have been maintained, since inflation has not receded at the desired rate, and the central bank of USA has voted to keep the cost of credit high in order to pressure slow the growth of the shortage.
The premise used is that by making credit more expensive, consumption is reduced, that is, it generates an impact on supply and demand, which causes producers and merchants to be pressured to lower their prices.
The impact of this on the dollar in Colombia It lies in the fact that the lower the interest rates, the greater the incentives to invest in the national territory (more dollars in circulation), which in turn translates into a cheaper greenback against the peso.
The exports They also translate into an important variable, representing an important source of dollar income for the country. However, these have been falling in the last year, mainly due to the deterioration in foreign trade in oil and products derived from extractive industries.
There are also the remittances, which have been registering an increase in recent times. Figures managed by the Bank of the Republic show that, during the first quarter of the year, Colombia received remittances for more than US$2,720 million, which not only translated into an increase of 9.8% compared to the same period last year, but also at the highest figure in history.
They are finally political factors internal and external, which can move investment. In the first category are the bills and national policies that may discourage or encourage the injection of resources from abroad; in the second, for example, the evolution of the conflict in the Middle East which, if it escalates, could increase the appetite for the dollar as a safe haven asset, which would increase its demand and make it more scarce (thus putting pressure on its price increase). ).
The main forecasts indicate that, as long as none of these variables register a significant movement, the Fed’s decisions will continue to be the compass that will define the north of the price of the dollar.
It is for this reason that its price is expected to continue moving in stable terrain, at the thresholds of $3,900 and $4,000.
