During the second week of the year, the dollar remained at the $4,000 border. Expectations for the behavior of the currency last week were driven by the publication of inflation data in the United States, which showed a consumer price index that is not falling at the expected speed.
The dollar closed at $3,893 on Friday, January 12, which is a decrease of $34 compared to the close of last Thursday, January 11 ($3,927).
According to Sergio Olarte, principal economist at Scotiabank Colpatria, “In the first half of January, the dollar has had quite a bit of volatility, but there has been more of a tendency towards appreciation than depreciation; That is to say, the peso has strengthened to the extent that investors and people who deal with the dollar are very attentive to when the Central Bank of the United States begins to lower interest rates in that country, which has made the risk appetite for emerging markets is a little higher.”
The behavior of the dollar depends on external and internal factors, such as the economic policy decisions made in the United States, employment figures, and the country’s economic and political situation.
It is worth noting that the value of the currency continues to show a high dependence on the decisions made by the United States Federal Reserve (Fed) regarding interest rates. The United States economy is the variable with the greatest weight in the movements of the dollar. On Thursday, it was learned that inflation in that country accelerated at the end of 2023, challenging market expectations that the Federal Reserve will soon begin lowering interest rates.
The premise surrounding the price of the dollar is that the more greenbacks circulate in the country, the lower their price will be; therefore, what happens with the FED will be decisive.
For this year, the dollar is expected to remain at relatively low levels, below the $4,000 barrier, with estimates predicting a currency that could be between $3,900 and $4,000 in the coming week.
According to Diego Franco, Head of Investments at Franco Capital Asset Management, “we believe that in the short term the market could reach $4,000 again, that would be our expectation. For people who invest in dollars, current levels are still advisable to buy partially, either the physical dollar, through digital wallets or from foreign companies listed on the Colombian stock exchange.”
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