The dollar was on the way to the upper flotation band. This trend may be highlighted this week and it does not seem embarrassing for the central bank to say that on Friday, Liquidity Letters decided to lower prices by 0.26 points to 61.75% and releases nearly $ 50 billion, which of course does not go completely firmly, but a good deal is converted into dollars.
The question is, who sells the dollars and what the price is asking for since the resurrection of Friday was very strong: rose to $ 1.22 to $ 37.70 for wholesale and good business. In the week, the dollar rose as much as a fixed month.
The USD and USD exchange rate rose on Friday $ 1.08 to $ 38.51.
The market, even in these values, thinks the dollar is overdue. By the end of the year there are those who invest it to $ 43 and are those who put up to $ 47 a band.
The question is that it does not go beyond the band and that is something that can be achieved without complications, which prevents the central bank from intervening in the market. On the other hand, the market has made adjustments to think more of the interest rate than the dollar's value.
The employer is more affected by the active interest rate, ie the borrowing rate of 5.5 per cent per month than the dollar, which rises 16 per cent this year and stabilizes at this level. This increase, so that the exchange rate back to the delay, equivalent to two and a half months rate. But if the dollar rises and the interest rate falls, the entrepreneur will compensate for the costs and take the benefits. In addition, the entrepreneur works with the dollar hypothesis for over $ 40. He knows that $ 37 is impossible to work and that when he needs to reform his stakes, the dollar is above this value. Therefore, it is easier to maintain the exchange stability at elevations than the flotation floor.
We must not forget that Argentina, as the maximum wage limits have been implemented, It's again expensive in dollars.
the country's inflation suffers from costs and today rates and taxes are more important in this cost. The high dollar is the result of these two variables because Argentina needs to be competitive because it must be a "high recontra" level, as the minister said in the 1990s.
Therefore, it should not be surprising that, starting from the beginning of this week, the rise in the exchange rate begins to look for the upper limit of the dollar. Chaos's thinking is not a consultant's hypothesis.
In addition, unfavorable winds are introduced from the outside. The decline in oil and government bonds, the strengthening of the dollar in other currencies and the rise in US dollar interest rates in December exerted pressure on the currencies of emerging countries that were condemned against the United States currency.
And although it feels like a paradox, which can alleviate these unfavorable changes in the world, it may be what happens in Argentina, which is the most unstable developing country. Fate is mocking because they can leave the country positive signals if Donald Trump and his Chinese counterpart Xi Jinping encounter a commercial war which translates economic activity in the world. The planet follows this meeting.
Wall Street now expresses pessimism and in these circumstances it can be seen that its functions are overvalued. In fact, VIX, also called a "fear index" because it measures the volatility of the North American market, is almost 22 points, a yellow alert zone. After 30 points there is an orange alarm and portfolios change and search for money safe.
Another problem in Argentina is the country's risk. October elections are a big obstacle for bonds that will expire after 2019, to attract buyers. For it, and the danger is close to 700 points, Argentina is at the mercy of the IMF, who is the only lender he can trust.
The tools that give rise to the crisis are very limited and depend on good yields, good international prices and advanced exchange rate levels.
Business balances close the investor's path to the stock market. Losses are too great to think about investing in stocks.
Secondly, is more than $ 100 billion in floats that estimate going to dollars. They do not want to be well-dressed in portfolios, despite 5% of monthly payments that pay some bonds and 4.5% monthly payments fixedly. In fact, the dollar a week rose to 4.87 and took away from the savers the winnings they thought they received in November.
Fixed assets are the largest holders of these deposits and investors can take them over because they are not deadlines.
Large companies are second aid. The fact is that the last tender for liquidity documents showed that the fixed terms are not completely renewable and that ahorristas and major investors began to dollarize themselves. At the beginning of the week they did it in a casual way. On the last day, the rise did not leave any doubt as to what the market would think.
"Carry-trade" (saving on weight and transfer of profits to dollars) ended.