The Value of the Dollar: What to Expect by the End of the Year?
The exchange rate in recent months has seen fluctuations, with the dollar’s value peaking at more than S/3.8810 in October before falling to S/3.7430 in November. Currently, it remains in the range of S/3.7 and S/3.8, with its value in the last BCR session being S/3.74.
However, Ana Lucía Rondón, Investment Associate at Prima AFP, has pointed out that the recent trend could favor the Peruvian sol. She stated that the price of the dollar rose in recent weeks due to the situation of the US economy, with lower expectations in the market than anticipated. However, there has been a regulation of these increases, leading to a fall in value from S/3.8. Rondón predicts that the Peruvian sol could strengthen by the end of the year.
Rondón also noted that there is a certain seasonality towards the end of the year as corporations tend to sell dollars to meet their obligations in soles, such as the payment of CTS and bonuses. This could support the sol towards the end of the year.
Looking at historical data, the price of the dollar closed above S/3.8 last December, but what will be the projection this December? Rondón forecasts that the price of the dollar will remain in the range between S/3.7 and 3.8 towards the end of the year, potentially around S/3.70, depending on external conditions.
As for the factors influencing the value of the dollar, Rondón highlighted three key components. She noted the announcement of lower-than-expected debt issuance by the US Department of the Treasury, a somewhat dovish tone at the recent Fed meeting, and weaker economic data from the US.
Overall, while the dollar has experienced fluctuations in recent months, the potential sell-off of dollars by corporations and the mentioned factors affecting the US economy could see the dollar trend downwards towards S/3.70 by the end of the year.