The price of the dollar opened higher minutes after the market knew the inflation data from the United States and a day after the data was released in Colombia. According to statistics officers, The variation of the Consumer Price Index was 3.3% in May, slightly below what the market expected.
The currency behaves upwards in the day with an average price of $3,985.76, $20.84 above the Representative Market Rate which for today is $3,960.83. During the day, the currency showed maximum prices of $4,013.57 and minimum prices of $3,970.0. Until that moment, 506 transactions had been carried out for a value of US$320 million.
“The dollar is strengthening throughout Latin America because inflation in the United States fell more than expected, which generates the expectation that the Fed will cut rates before the end of this yearfavoring investments denominated in dollars,” said Juan David Ballén, Director of Analysis and Strategy at Casa de Bolsa SCB.
There is an upward movement, and this is more of a regional movement, in which the Mexican peso, which was the great bastion of the region, has been losing value for several days. Despite the inflation data in the United States, In Colombia we are seeing this behavior in Mexico“said David Cubides, director of Economic Research at Alianza.
Inflation data showed that core data in the US also slowed for a second month in May, which is a signal to Federal Reserve officials who are looking for signs that they can start lowering interest rates.
The so-called index of underlying consumer priceswhich excludes food and energy costs, rose 0.2% from the previous month and energy rose 0.2% from April, according to data from the Bureau of Labor Statistics.
The data is known hours before the decision that the Federal Reserve will announce, that seeks for inflation to reach the 2% goal.
“During the meeting the inflation data will be known, and that is what will determine the points”Diane Swonk, chief economist at Kpmg, told Bloomberg. “The final determinant is going to be the inflation figures.”
According to the agency, The Federal Open Market Committee of the Fed is expected to keep its reference rate stable for the seventh consecutive meeting.
Locally, Analysts also reacted to Colombia’s inflation data, which stood at 7.16% in May.which, although it showed a slowdown compared to the same month last year, had the same variation as April.
Source: Dane
Inflation came from 13 consecutive months of deceleration since March of last year when The rate measured by Dane went from 13.28% to 13.34%.
The annual variation was led by education (11.42%), restaurants and hotels (9.76%), and accommodation, water, electricity, gas and other fuels (9.14%). Other sectors that had a strong increase in May were transportation (9.07%) and alcoholic beverages and tobacco (8.59%), which were above the national average.
How are oil prices today?
Oil prices began the day higher after industry data point to a reduction in US crude reserves ahead of a government reportas reported by Bloomberg.
The Brent reference barrel rose 1.25% and stood at US$82.93, while the WTI reference grew 1.37% and reached US$78.97.
The American Petroleum Institute reported that US crude oil inventories fell by 2.4 million barrels last week.according to people familiar with the data consulted by Bloomberg.
“We see a sizeable deficit in the third quarter, which suggests prices still have room to rise,” Warren Patterson, head of commodities strategy at ING Groep NV in Singapore, told Bloomberg. “The oil balance will be adjusted in the short term“.
The International Energy Agency also estimated that global consumption will “stabilize” at 105.6 million barrels per day in 2029., about 4% above last year’s level. According to the IEA, global oil consumption will continue to grow for several years, reaching 4 million barrels per day by the end of the decade, Bloomberg reported.
And according to the IEA, oil consumption will continue to grow for several years in the world. Bloomberg mentions that this could reach four million barrels per day by the end of the decade. The above may happen due to the expansion of the economies of China and India, and the increase in consumption in sectors such as aviation and petrochemicals.
However, Bloomberg also points out that consumption of this raw material will continue to decline in the most developed economies, going from 46 million barrels per day in 2023 to 43 million in 2030, the lowest level since 1991. Finally, According to the report in Bloomberg, China’s demand will also stabilize at the end of the decade at 18 million barrels per day.
