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Future dollar: the market expects an official exchange rate of $ 111 at the end of January

File photo. One hundred US dollar bill on several hundred Argentine peso bills. Sep 3, 2019. REUTERS / Agustin Marcarian / Illustration

If you look at the bets on the future dollar, the market believes that the anchor will remain this month and the currency will close at $ 100.92. But by the end of December they expect a dollar of $ 105.10, which implies a devaluation of 4.14% and by January they believe that the dollar will be at $ 111.19. According to prices, from December to January the value of the wholesale dollar will increase 5.79% and from today until the end of January it will be 10.50% more expensive.

Anyone saying it could be surprising because it is a figure that is released on the air for free. But when those who speak do so with figures behind which their money is, the possibility that it is fulfilled is more certain. It may happen that there are many sellers at that price, the Central Bank included, but it is surprising that there are buyers who pay these values.

The signals in the foreign exchange market set a course. There is almost no intervention from the Central Bank because, aside from China gold and swaps, freely available liquid reserves are zero or below zero and are sustained by short loans from the Bank of Basel, the Central Bank of the United States. central banks of the world.

The statements and contradictions on the same day by Miguel Pesce, the head of the Central Bank, and the clash of opinions with the Minister of Economy, Martín Guzmán, show the lack of definition within the Government regarding the negotiation with the IMF. For many, the promised economic plan is still a draft that is far from becoming a real plan and the agreement with the multilateral organization a distant possibility.

This explains why the country risk has broken the record due to the 1% drop in Argentine bonds of debt with foreign legislation. Now rose 21 units (+ 1.2%) to 1,816 basis points, just over 300 points from the 2,147 points they had when the default was declared. In one year the risk increased more than 80%. They are not numbers for an economy that is close to an agreement with the IMF. The collapse of the Turkish currency can be adduced, but no emerging country was as affected as Argentina in the value of its bonds.

In fact, the AL30 bonds that were used to intervene in the official MEP market and counted on liquidation, seem to have lost their reason for existing and there are no buyers who want them because they lost the motivation to generate profits by arbitrating them within the same wheel because Due to the intervention of the Central Bank, they were more expensive in the morning than at closing. As this operation was prohibited and the Central stopped intervening, the market was reduced to its minimum expression, although the MEP dollar is now trading at $ 204.88 (-0.94 cents).

Cash with liquidation, which also considerably reduced its operations, ended the round with a drop from $ 1.49 to $ 216.74 in free operations. The “blue”, which is ignored by almost everyone and has no business, dropped $ 1 to $ 200.50.

In the wholesale market, where the dollar rose 5 cents to $ 100.63, the Central Bank bought USD 130 million and made the reserves rise USD 82 million to 42,132 million, but they lose USD 534 million so far this month.

$ 1,487 million were traded on the Stock Exchange, a volume that shows that the exit from this market is constant and that as long as banks continue to be mistrusted by the rumors surrounding the Central Bank’s Leliq that they keep in their possession, they will continue to decline and will drag down the rest of the papers. The S&P Merval fell 0.37% and the fall in the post-election wheels adds up to 12% against a MEP dollar, which in that period rose just 2.80%. So the market lost almost 17% in dollars.

“How long are they going to bet on a market that goes down every day? How much more do they have to lose?”Asked an operator reflecting on his disappointment and that of his clients.

The ADRs – certificates of holdings of shares listed on the New York Stock Exchange – operated less than usual. The volume reached $ 2,505 million and almost all the certificates ended the wheel in decline. BBVA lost 4.2% and YPF, 3.4 percent.

For today a wheel with less movement is expected for the United States holiday. Perhaps the departure of the big players will calm the high volatility that grew after the midterm elections because this situation hinders all operations with a cable dollar or cash with liquidation. The Stock Market will be the center of investors who will try to recover some of the much lost.


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