Dollar price today January 22 in Colombia

He dollar The price closed lower on Monday, consolidating at $3,904.50. This represents a decline of $7.5 from Friday’s close, thus registering a deviation of -0.19%.

Representative market rate (TRM) remains at $3916.39.

The dollar continues to show strong dependence on the decisions that the Federal Reserve Board may make regarding interest rates.

The reason for the above is that the lower the rates, the more investment opportunities, meaning more dollars in circulation in countries like Colombia. This scenario would imply a cheaper currency.

At its last meeting, the Fed voted to keep rates steady and is expected to prepare its first cut in line with falling inflation in the United States, since, remember, making borrowing more expensive was the main goal. strategy to combat growing deficits.

“While overall the exchange rate did not appear to have moved much, volatility was high,” said Jacqueline Pirahan, economist at Scotiabank Colpatria. In his opinion, this instability can be explained mainly by international reasons.

Read also: Davos, wealth and taxes: gaps in the meeting of the powers that be

Over the past week, such factors include the meeting of the World Economic Forum in Davos, where “statements were made by central bankers trying to temper expectations of a rapid reduction in interest rates, both in the United States and in Europe and other developed countries.” – says Pirahan.

And he concludes that “the S&P announcement had a small and short-lived impact on the exchange rate, so we support the idea that what matters most for the exchange rate for now is still the international component.” Pirahan is referring here to Colombia’s credit rating issued by Standard & Poor’s this week, a decision in which the agency maintained the rating (BB+) but downgraded its future outlook from stable to negative.

What factors will influence the dollar this week?

On the international side, Diego Franco, head of investments at Franco Capital Asset Management, also sees a market correction relative to Federal Reserve (Fed) interest rate expectations gradually easing.

It is worth clarifying here that the next Fed meeting to decide on interest rates will take place between January 30 and 31, when interest rates are not yet expected to cut, because although inflation is falling, there is still strength in the labor market, which may indicate to the fact that the Fed predicts that there is still room to rein in rates.

Read also: Inflation and corporate profits: an open discussion

Among the international factors, Juan David Ballen R., director of analysis and strategy at Casa de Bolsa SCB, also sees inflationary consequences that “will lead to an increase in sea freight prices as a result of disruptions in the Suez Canal.” like the drought in the Panama Canal.

These are two major pressures on global trade that could well lead to higher prices for all types of goods, giving oxygen to inflation and thereby preventing a possible rate cut by the Fed.

This week, the data that analysts consider to have the greatest impact on the dollar in Colombia will be the publication of US GDP data for the fourth quarter.

Likewise, the international scene also sees the first decisions of central banks on their interest rates (eg in Japan and Europe). These determinations, added to US GDP data, “are very important because they will confirm or rule out the possibility of a rapid decline in interest rates. For this reason, last week we have to be very attentive to what is happening outside to know what is happening with the exchange rate in Colombia.”

For Franco, it is entirely possible that in this scenario the dollar will reach $4,000 by the end of the week.

💰📈💱 Have you heard the latest news yet? economic? We invite you to see them at El Espectador.