The dollar closed this Wednesday at an average of $4,272 and fell $37 with respect to the Representative Market Rate (TRM)an indicator that is set according to the intermediate price registered during the previous day’s negotiations.
Experts consider that This decrease is due to the inflation data for July in the US (8.5%), which was lower than what analysts expected and this caused the dollar to weaken not only in Colombia but in a block of emerging countries.
Gregorio Gandini, financial market analyst, explained that this data on the Consumer Price Index in the United States, “leads to greater peace of mind considering that it suggests less monetary control and the perspective of recession in that country is subtracted.
The foregoing is relevant in two ways: if the value that Americans pay for products and services slows down, the Federal Reserve (Fed) —a counterpart of Banco de la República— would not have to raise interest rates aggressively. Consequently, investors would not move the dollars into that economy because the return on putting them there would no longer be as high.
And on the other hand, if rates don’t go up considerably, people’s consumption is not affected to a greater extent and lowers the risk of economic recession. This implies that Colombia’s largest trading partner might continue buying goods produced here and the economy would not lose strength in the area of foreign trade.
According to Gandini, investors must now remain attentive to what happens in the United States, mainly with the next meeting of the Fed, in which the increase in rates will be determined. In addition, at the local level, it will be necessary to see what happens with the tax reform project.