The price of the dollar rose on Monday due to the risk of international inflation

The price of the dollar in Peru closed the trading session on Monday at S/3.859, an increase of 0.49% compared to the figure obtained on Friday.

According to Alberto Arispe, general manager of Kallpa SAB, this result occurred as a reaction to the announcement by the United States Institute of Supply and Management, which stated that the purchasing managers’ index in that country grew in November and stands at 56.5 %. This implies that the Services sector, which accounts for more than two-thirds of economic activity in the United States, remained resilient despite interest rate increases.

“The rise is a sign that the economy is not cooling off, which is what the Federal Reserve is looking for so that the inflation come down. So consumption remains strong, which does not cool the inflation, and that could cause interest rates to rise again in the coming months. This would also increase the price of dollar”, he explained.

He also indicated that consumer spending should also continue to rise due to the increase in US employment in October.

In this regard, he stressed that Peru and the rest of the countries in the region would be hit if rates continue to increase as they are emerging markets, as projected by the market.

“if the inflation remains strong and interest rates continue to rise, that will increase the strength of the dollar globally. This will cause the economy to cool down, which implies less investment globally. That will affect the price of copper, it will affect the price of our exports. In general, all emerging countries will be affected”, he indicated.

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The situation of the US economy also led to the economic indicators of that country closing down during the day on Monday.

The S&P 500 had a fall of 1.79% compared to Friday’s close; the Dow Jones, of 1.37%; and the nasdaqof 1.62%.

“Morgan Stanley strategists said they expected a 15-20% drop in the value of Morgan Stanley’s shares. S&P 500 at the beginning of 2023. This caused the strong sale of shares in the market and the fall seen”, affirmed Arispe.