Leaving behind all the forecasts that were held for this day and the end of August, the price of the dollar in Colombia closed with a strong rise that shot it more than 30 pesos above the records achieved at the beginning of the week, when the pressures of the international markets affected a drop in its value.
At the end of operations for today Tuesday –August 30– The last price reached by the US currency, according to the Colombian Stock Exchange, was 4,422 pesos and 50 cents, almost 45 pesos above the average records of the previous session, when it was around 4,380 pesos.
Likewise, the average value for today was 4,402 pesos and 49 cents, 16.36 above the Representative Market Rate set for today by the Financial Superintendence at 4,386.13, after yesterday’s crashes, which mostly were influenced by the Fed’s announcements last Friday.
For experts such as Juan Eduardo Nates, an analyst at Credicorp Capital, these results are given as an effect of the crash yesterday, Monday, when the market was still holding resentful of what was said by the president of the Fed, Jerome Powell, regarding interest rates and the new drop in GDP in the United States.
“Yesterday we saw how the Colombian peso broke 4,400 hard below, showing how it resisted at 4,370 and today we expected or ideally it would break 4,355 as a maximum and 4,335 As minimum. However, as we have seen, the markets remain fearful and that is why this currency shot up again,” said Nates.
In other values for today’s session, the dollar in Colombia fell to a minimum of 4,351 pesoswhile its maximum even reached 4,429 pesos and 70 cents, a sign that investors continue to opt for safe-haven assets and are causing their price to rise due to the law of supply and demand.
It should be remembered that the gross domestic product (GDP) of the United States contracted somewhat less than initially announced in the second quarter, 0.6% in the annual projection, but continues to decline, threatening to take the world’s largest economy to the recession. The second estimate from the Department of Commerce is 0.3 percentage points lower than the first estimate (-0.9%) announced at the end of July.
However, US consumer confidence rose in August after three months of decline and improved more than expected, although fears of inflation and a possible recession persist, the Conference Board reported on Tuesday. The index that measures confidence rose to 103.2 points against 95.3 in July, whose data was revised slightly downwards. Analysts expected 97.4 points.
Fear of a recession reigns among investors
Although studies like this show that the picture seems to improve in the future, the prevailing fear in the markets cannot be ignored. Just remember that Wall Street lost all of its August gains on Friday after Powell dashed hopes of an easing of the Fed’s monetary policy in the near future.
“He seemed determined to use high interest rates and not cut them quickly in the future, even if that spells hardship for households,” said Patrick O’Hare of Briefing.com who added that “Powell did not throw a glass of water in the face of Wall Street. He poured a bucket of ice water on her!”
The idea of a future increase in the price of money through the rise in interest rates weighs on the perspectives of financing and the results of companies, especially in the area of technology, and again weighs down the indices, particularly the Nasdaq.
Throughout this day, both Wall Street and the European stock markets have traded lower, affected by the continuing fear of a possible recession in the United States, due to inflation, and in Europe, due to a possible shortage of gas.
*With information from AFP.