On March 8, more than USD 1,449 million was traded in 1,893 transactions. REUTERS
The price of the dollar in Colombia had a new rise on Wednesday, March 8. On this day it closed at an average of $4,755.89, after a rise of $10.94 compared to the Market Representative Rate (TRM), which today stood at $4,744.95.
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On this day, the US currency had an opening price of $4,769.95, while it had a maximum record of $4,794 and a minimum of $4,723. According to the Set-FX platform, more than USD1,449 million was traded on March 8 in 1,893 transactions.
The volatility of the dollar will continue due to national and international factors, among which are the economic policy messages of the Government of Gustavo Petro, Russia’s invasion of Ukraine, the rise in interest rates by the United States Federal Reserve (Fed) for reduce inflation, the same path that the Bank of the Republic of Colombia took, and the warning made by the World Bank of economic recession and the announcement of economic slowdown.
The new upward movement occurs after the president of the Fed, Jerome Powell, warned that the agency is prepared to accelerate rate hikes if the economic data justify it.
“If the totality of the data indicates that faster tightening is justified, we would be prepared to accelerate the pace of rate hikes,” Powell told the US Senate in his semiannual appearance.
He added, according to EFE, that the country’s latest economic data “has been stronger than expected,” suggesting that “the final level of interest rates is likely to be higher than previously anticipated.”
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Given these statements, the sentiment of risk aversion increased considerably and strengthened the dollar.
Meanwhile, analysts from the brokerage firm Acciones & Valores specified that yesterday, after Powell’s announcement, the peso had a very different behavior compared to other Latin American currencies, for which upward pressures were generated against the dollar and ended appreciated compared to Monday’s close.
“In the case of Colombia, the magnitude of the movements seems to be the effect of the correction of the last days that were bearish and were not supported by macroeconomic fundamentals. The perception of risk remains at high levels and increases volatility”, analysts explained.
In turn, they noted that it can also be partially explained by a significant decrease in Brent benchmark oil prices of -3.55%, given expectations of a global economic slowdown around the continuation of the contractive monetary policy.
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Similarly, they made it clear that relevant data for the Colombian economy is not expected for this week and, therefore, the behavior of the currency will be determined by external factors.
Meanwhile, the director of Economic Research at BTG Pactual, Munir Jalil, told Valora Analitik that given the wide volatility of the dollar in recent weeks, standing at levels between $4,680 and $4,900, it is expected that in Colombia it will be around $4,820. at the end of the third month of the year.
“Our exchange rate is the only one that has not reached the levels we had before 2022. In the very short term, very important meetings are coming up this month with the Fed, the European Central Bank, and around this, if it continues with a very aggressive speech from the Fed, I think what we are going to have is the exchange rate at levels a little bit higher than where we are today,” Jalil said.