The price of the dollar continues to depend on the decisions of the Fed and the conflict in the Middle East.
The dollar closed its price on Friday higher, registering $3,913.10. This translates to $10 more compared to Thursday’s close, as well as a change of 0.25%.
The Representative Market Rate (TRM) remains at 3,898.62.
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The movements of the dollar seem to respond, for now, to the rhythm that the Federal Reserve (Fed) has set in recent months.
This is because the board of directors of this central bank is responsible for deciding on interest rates in the United States. It must be remembered that it has decided to keep them high, in the midst of inflation that also continues at high levels (although with a decreasing trend).
However, the reduction in shortages has not been as the Fed would like, so the board of directors continues with its commitment to make credit more expensive to reduce demand and, thus, pressure the reduction of prices.
This has its echoes in countries like Colombia, as it discourages investments, that is, the injection of greenbacks into the national territory. In short, fewer dollars in circulation translates into a more expensive currency.
However, what we have seen in recent months is a stable behavior of the dollar, fluctuating between $3,800 and $3,900, after having surpassed the $4,000 barrier in the most aggressive times of inflation.
Many analysts are waiting for the Fed to lower its interest rates (which does not seem very likely in the short term), since this would stimulate a reduction in the price of the currency.
However, it must also be taken into account that there are other variables that are putting pressure on the price of the dollar. An example of this is the conflict in the Middle East which, if it escalates, would increase the appetite for the greenback as a safe haven asset.
There are also internal state reforms and movements in Colombia, which could encourage investments or drive them away. Again, if you want a cheap dollar, it is advisable to stimulate the arrival of dollars to the nation via investment and foreign sales.
