This Thursday, the dollar closed at $4,519.92 on average, which represented a decrease of $38.13 compared to the Representative Market Rate (TRM), which for today’s session stands at $4,558.05.
The opening price recorded by the Set-FX platform was $4,550 while the high reached $4,583.80 and the low $4,483.50. During the day, more than US$1,489 million were negotiated through 2,877 transactions.
For his part, Sergio Olarte, chief economist at Scotiabank Colpatria, points out that global uncertainty about the recession makes any news move exchange rates. In addition, “the rise in the exchange rate in Colombia, last week, was much stronger than that of other countries, so the correction comes in the same proportions.”
This downward behavior also occurred after the inflation data in the United States of 9.1% year-on-year was known, as the markets anticipated a short-term rise in their rates by the Federal Reserve, to begin lowering them again in February next year, according to financial analysts.
But could it be said that he hit his ceiling? For Diego Palencia, Vice President of Research at Solidus Capital Investment Banking, “I don’t think it will correct downwards in the coming days. It’s just going to increase volatility. It will go up and down based on market changes, but there won’t be much of a change in high inflation, he said.
The price of the greenback in Colombia has registered an upward trend in recent weeks, breaking highs with each day of trading. In fact, the TRM has earned more than $722 since June 19, when the electoral results were known, which is how the upward behavior is also driven by the uncertainty surrounding the new Government of the President-elect, Gustavo Petro, who still he must make more cabinet appointments.
Another factor to mention and that has undoubtedly influenced the currency’s rise is the international situation, especially the risk of recession in the United States, as well as the increase in interest rates by central banks to curb the inflation.
“The inflation data in the United States is generating expectations that the Federal Reserve is not going to keep rates high for a long time, that is, we are going to expect strong increases in the short term, but it is likely that in February 2023 begin to lower them. The markets are anticipating the rate cut next year, due to the imminent recession in the second half, which causes the dollar to weaken and currencies begin to correct against the dollar,” said José Luis Hernández, institutional desk trader of Corficolombiana.
Added to this is the behavior of crude oil prices, Oil prices fell more than $2 on Thursday as investors focused on the prospect of a big US rate hike later this month that could curb inflation but hit demand at the same time. of crude.
Thus, the barrel of Brent, a reference for Colombia, fell 1.39% to US$98.19; while West Texas Intermediate (WTI) also fell 1.64% to US$94.72.
Brent oil pulled back after buoyant US inflation bolstered expectations that the Federal Reserve will make more aggressive interest rate hikes.
The global benchmark for crude fell as much as 2.4%, hitting its lowest level since March, while West Texas Intermediate also fell. Broader markets were weaker on Thursday as the dollar resumed its advance, weakening commodities traded on the currency. Traders have shifted to expectations of a historic one percentage point Fed interest rate hike later this month.