jump of the blue and parallel forces to change strategies, will they continue to rise?

jump of the blue and parallel forces to change strategies, will they continue to rise?
jump of the blue and parallel forces to change strategies, will they continue to rise?

Buenos Aires – Stock dollars averaged a rise of up to $19 this week. This Monday the Cash with Settlement (CCL) and the MEP were trading close to $190. Already this Friday they are around $209. A similar path traveled the blue dollar, which broke the calm with a rise of up to $8 from Tuesday to trade at $203 for sale this Friday.

The parallels had been in a strong downward trend since news of the IMF deal began in late January. Calm remained during March and the gap with the official exchange rate approached 70%, despite inflation that accumulated 16.1% in the first three months of the year.

These prices favored the carry trade, the operation in which one goes from dollars (MEP) to tools in pesos for a short term. A report by GMA Capital highlights that the yields in dollars of the best options in pesos “exceeded 22% in the (first) quarter (121% annualized)”. The scene changed. The rise in the dollar and a weakening in the reserves of the Central Bank would recommend another investment strategy.

Is the rise in the dollar temporary?

“It is a financial asset and ultimately there must be normal ups and downs. It is striking that the blue and the financiers have fallen in this time. The dollar, since the agreement with the fund, has fallen around 6%, which is a lot in a country where inflation has accelerated,” says economist Iván Carrino.

    • Why was it going down? “Behind this there is less nervousness on the part of post-agreement investors and it also weighs on the fact that the dollar was weakening in the world. It falls in Brazil, Chile and Colombia,” added Carrino.

“I attribute it to a normal market rebound,” adds Christian Buteler, financial analyst. And he added: “Until March, inflation accumulated 16.1% and the dollar had not moved, we were at similar values ​​at the end of 2021, and that is not sustainable.”

Based on that, it doesn’t seem strange to me that he has begun to move, that he recovers a little what he lost in the year. And that it begins to follow the value of inflation, that it rises like the rest of the prices in the economyButeler explained.

How long will the dollar rise?

For financial analyst Salvador Di Stefano, not much. “In recent days we have seen a recovery in the prices of alternative dollars, it does not seem to us that this rise is going to consolidate in the coming weeks. We will have a large foreign exchange income from exports, companies are suffering from liquidity due to lower sales, credit restrictions and rate hikes”, he specified.

End of carry trade?

the season of carry tradewhich dominated the first quarter of the year, seems to have come to an end.

A report by financial group AdCap, which recommended this strategy in March, stated this week that “one of the main assumptions, the accumulation of foreign exchange reserves, has been working poorly so far, so we think it is a good time for profit taking after a significant outperformance in inflation-linked bonds in pesos” .

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The article is in Spanish

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