The dollar continues to fall and reaches the minimum value for the week

In recent days, the US dollar saw a decline against the Colombian peso, closing at 3,764.19 pesos. This change represents a decrease of 1.18% compared to the previous day's close, which amounted to COP 3,811.61. This movement continues the downward trend observed in recent days, and is the third consecutive date in which the dollar recorded losses against the Colombian peso.

Analyzing the weekly behavior, the US dollar recorded a decline of 2.38%. Its decline deepened until it reached an annual decline of 9.05%. This downward trend is evident in a context in which currency volatility has been significantly lower compared to the annual average. In recent days, the volatility reached 7.44%, which is much lower than the annual volatility recorded at 14.88%.

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In this scenario, which is characterized by more moderate fluctuations than expected, the Bank of the Republic of Colombia expects an encouraging future for the national currency. According to its forecasts, by the end of 2024, the exchange rate will average 4,081 pesos per dollar. This estimate indicates a gradual recovery of the Colombian peso, moving away from the high peaks that the currency reached between the end of 2022 and the beginning of 2023.

The current bearish trend of the dollar and the optimistic outlook of the Colombian Central Bank provide a respite for the local economy, providing a more stable environment for businesses and consumers. The decline in the value of the dollar against the Colombian peso could have positive effects on inflation and purchasing power in Colombia. At a time when the country seeks to enhance its economic recovery.

During the trading session on Friday, April 5 on the stock market, the US dollar showed a bearish opening, crossing $3,764, a value lower than the representative market price set for the same day.

As the morning progressed, the North American currency continued to show a slight downward trend, reaching around $3,763.68 at around 12:30 p.m. Market analysts expect that this downward trend may continue until the end of the week, which could have major implications for the financial markets.

This decline in the value of the dollar is due to several factors that affected investors' perceptions. And in the behavior of financial markets. First, there is the rise in oil prices, which has been driven by supply concerns due to the conflict in the Middle East.

In addition, economic data was released in the United States that raised concerns about the state of the economy. In particular, figures on private employment and unemployment were published, which showed a deterioration in labor market conditions. This situation has raised expectations that the Federal Reserve will take steps to stimulate the economy, which could include lowering interest rates in the coming months.

As a result of this fluctuation in the value of the dollar, exchange rates in the local market result in buying foreign currency at approximately $3,700 and selling it at approximately $3,820.. These rates can continue to adjust in response to changes in market conditions and the Federal Reserve's monetary policy decisions.

In this context, Henry Amorosho, professor of public finance at the University of Del Rosario, pointed out that “the conflict in the Middle East had a significant impact on oil prices, which in turn led to a weakening of the dollar in several countries in the world.” The region,” he explained to El Heraldo.

*This note was prepared with the help of artificial intelligence