The Dollar Today: Why the Fed Speech Impacted the Local Market & More Latest News Here

Despite the slowdown in inflation in the United States in July, the Federal Reserve (Fed) confirmed this morning that the American economy will need a tougher monetary policy “for a little longer”. The news has a negative impact on emerging markets, as investors take refuge in safer assets, which explains the decline in bonds and equities, while the Argentinian risk has exceeded the 2400 point mark.

“Wall Street is leaning towards a negative reaction, while the Fed was leaning a little more”falcon‘ (restrictive monetary policy) by reaffirming that it will continue with a restrictive policy bias with the aim of continuing to fight inflationeven recognizing the collateral damage that such a strategy could have in the short term of an economic slowdown. Given the pause in the north wind, domestic assets are leaning towards profit taking after the significant rally – albeit from minimal levels – that they had recently tested,” said Estudio Director Gustavo Ber. Ber.

In this context, Today, the S&P Merval was trading at 141,459 units. This was a daily decline of 0.9%, leaving behind the maximum nominal values ​​it had marked in the previous days. In the panel of the Buenos Aires Stock Exchange, the largest falls concerned Cresud (-5.4%), Edenor (-4.4%), Banco Supervielle (-2.9%) and Central Puerto (-2, 8%). ).

The same trend was observed for Argentine stocks listed on the New York Stock Exchange, better known as ADR, since the numbers in red predominated. Globant shares fell 6.5%, followed by Cresud (-5.7%), Edenor (-5.1%) and Ternium (-5.1%). Conversely, Banco Macro (+2%), Corporación América (+1.7%) and Transportadora de Gas del Sur (+0.9%) progressed.

Federal Reserve Chairman Jerome Powell

“Our assets are riding the regional wave, which on the other hand is looking north with some concern that the Fed will be more assertive than expected. However, the strength of the global dollar and rising interest rates seem to have weighed less during this historical period than finds strong support for our region thanks to high commodity prices produces growing geopolitical tensions,” they explained from Delphos Investment.

However, from the stock company they remarked: if the Fed continues with this “brutal determination to cause a recession end inflationit is likely that emerging countries -including Argentina- will be ultimately negatively affected.

The obligations of the latest debt swap also ran into negative territory. Abroad, sovereign securities in dollars fell to 2.5% (Bonar 2029), while at the local level the fall was 3.7% (AL29). Therefore, country risk increased by 84 units and stood at 2,400 basis points (+3.6%).

“Global market volatility has returned. With raises at the start of the week, but which ended negative on Friday, after Jerome Powell’s remarks in Jackson Hole. With inflation already at calmer levels, the Fed chief once again sounded “tough” insisting that until inflation is brought under control, the Fed will continue to raise the rate. The market does not like this music and it ended on a very negative Friday,” acknowledged Fernando Marull, economist at FMyA.

At the end of Friday, the blue dollar was offered at $292, $1 less than the previous session (-0.3%). It has been nearly a month since the note, which is traded informally, has managed to stabilize below 290 dollars, values ​​far from the 338 dollars it recorded in mid-July.

“The dollar still has room to come down to a 70% gap, since if it stabilizes at $290, it’s still a 40% jump in two months. Remember that the race started at $210. But for this, signs and concrete measures are necessary. The parallel exchange rate fell with the announcement of Sergio Massa in Economy, which served as expectations, but it was not enough. This week news of a narrowing budget deficit broke, the Central Bank stopped selling reserves and ended the disastrous and disturbing dynamic of the number of dollars it was losing every day, and an executive order was issued which generated savings of $128,000 million. There were signs of deepening or resumption of the trend, momentary, to settle lower“, indicated the financial analyst Christian Buteler.

The same thing happened with financial exchange rates, which fell for the third consecutive round. The MEP dollar was trading at $284.28, a daily decline of $3.50 (-1.3%). Cash with liquidation (CCL) fell $3.50, to $292.53 (-1.2%).

“After turbulent days in the markets, this week there has been some calm. Far from having solved the big problems, the market grants a truce to the minister [de Economía] Serge Massa. The reasons for this “little summer” lie in the fact that the Central Bank has stopped losing reserves, the cost being essentially the loss of well-being due to the curb on imports. But if there are no concrete and permanent solutions, the market will soon show tension again,” warned by the economic consultant LCG.

The wholesale exchange rate appeared on the screens at $137.70, thirty cents more than yesterday (+0.2%). Contrasting with the blue dollar, the gap was positioned at 112%. It’s been 45 consecutive wheels that the gap is more than three digits.

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