Dollar rises while waiting for the FED, in a context of international uncertainty, by Fernando Ruiz

The exchange rate closed the session on Monday, January 24, at S/3.849, which represents an increase of +0.37% compared to its closing level on Friday (S/3,835). This rise occurs in a context of global strengthening of the US currency in the face of growing uncertainty and tension regarding a possible escalation of the conflict in Ukraine.

This greater sense of risk boosted the performance of safe-haven assets during the session, making those with higher levels of risk, such as the currencies of emerging countries, less attractive.

This strengthening of dollar it was boosted by growing speculation regarding the announcements that the US Federal Reserve will make. The FOMC will hold its January meeting this Tuesday the 25th and Wednesday the 26th, in which greater scope is expected on the start and speed of withdrawal of the monetary stimulus program implemented in the face of the COVID-19 pandemic.

Currently, the market expects a potential start of increases in its interest rate in March, an announcement about the reduction in the asset purchase program and a tougher language against inflation by the FED, expectations that have already been incorporated. at the current price of dollar. A scenario in which these expectations are not met this Wednesday could lead to a correction in the value of the US currency.