Dollar closed at $4,151.77 on average and is $1.23 away from reaching its all-time high

This Thursday, the dollar closed the day at $4,1151.77 on average, which represented an increase of $24 compared to the Representative Market Rate (TRM), which for today’s session stands at $4,127.47. This behavior occurred hours after it became known that the new Minister of Finance is José Antonio Ocampo, and with the definition of the new intervention rate at 7.5% by the Banco de la República.

The opening price recorded by the Set-FX platform was $4,120, but around 9:40 am The greenback surpassed its all-time high of $4,153 (recorded on March 20, 2020) and touched $4,179.70 in intraday movement. However, with the closing data, the currency is $1.23 away from that maximum.

Issues outside the economy are driving behavior. “The dollar index rose 0.36% to 105,235 points due to greater pressure from recession in the US. following inflation warnings by central banks, and copper’s 2.38% drop on the London Metal Exchange to $3,740 a pound, its lowest level since February 9, 2021. The dollar has been breaking price records that it has never seen before, and this has been explained by a set of factors both internal and external. In the latter case, the slowdown in the Chinese economy as a result of the strong confinements it carried out to eradicate the virus, and the slowdown in large economies globally, has generated lower prospects for demand for the red metal,” he explained to Diario Financiero, the senior market analyst at XTB Latam, Juan Ortiz Godoy.

However, the exchange rate could be regulated in the coming days with the appointment of Ocampo, since “it provides confidence in the technical and weighted nature that the macroeconomic policy of the Government of Gustavo Petro will have,” said the president of Asobancaria, Hernando José Gomez.

For his part, Julio César Romero, chief economist at Corficolombia, believes that the market will receive it as a message of responsibility in economic management. “Ocampo is one of the best economists in the country and has already given several clues about the most important points that he will work on. In the next few days we could see an appreciation of the peso close to 2%,” he said.

Ocampo is one of the best known economists, having co-authored books with Nobel laureate Joseph Stiglitz. He has already served as Minister of Tax authorities in the 1990s, he was Minister of Agriculture and head of the National Planning Department.

Now, analysts also state that the minister’s announcement was a possibility that had already been discounted by the market in the exchange rate, that is,“doesn’t have the same effect right now; what could be corrected this week to have an excellent performance of the dollar, that is, to lower the price, was lost,” said economist Martín Jaramillo, who added that in the medium term the trend could change when seeing the first reform .

Regarding the BanRep meeting, the market has already discounted an increase of this magnitude, and if this expectation materializes, it would not have an effect on the currency.

The external context continues to determine the exchange rate in Colombia. Expectations of central bank rate hikes to control inflation and fears of a global recession keep the dollar strong around the world.

Another factor that explains the rise in the dollar is crude oil, which during the past week registered downward days. However, today the price of Brent oil, a reference for Colombia, reaches US$115; while West Texas Intermediate (WTI) is trading at US$104.

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Dollar closed at $4,151.77 on average and is $1.23 away from reaching its all-time high