Regardless of whether the dollar breaks the barrier of $5,000 in its average price in upcoming negotiations and whether the TRM is set above this psychological level, the trend of the US currency will be bullish in the medium and long term, taking into account the turmoil in the local political environment and the international events that are generating upward pressures for the US currency.
“In the long term, it is estimated that the dollar will tend to rise considering that there are many investment capitals that are reconsidering investing in Colombia or not, taking into account that there is no internal clarity on how the tax and economic issue of the country will be handled. and how the investor will behave in the face of these changes. Regardless of whether it goes up or down tomorrow, the dollar will have a future upward trend,” said Jeisson Balaguera, executive director for Values AAA.
For the analyst, this situation of local uncertainty that this Tuesday was more stressed by the presentation of the paper to the second debate on the tax reform and the closeness with the decisions of the FED, which will announce this Wednesday if it raises its interest rates , further stirred up the local market and led the dollar to exceed $5,000 in its daily trading. The foreign currency fluctuated in a trading range between $4,886 and $5,017.
According to Balaguera, the US currency could soon break the resistance and support of the market, that is, those levels to limit the range of movement of supply and demand in dollars.
Other facts that mark its trend
Financial analysts attribute this situation to international pressure on emerging currencies but also to internal factors such as the imbalance in the country’s external accounts, the deficit in the trade balance and the uncertainty about the future of the oil industry, which is the largest generator foreign exchange for Colombia.
“When future revenues from the oil sector are questioned, that begins to take its toll on foreign investors,” recently stated the head of Economic Research for the Andean Region of BTG Pactual, Munir Jalil.
Doubts about the oil sector have to do with the Colombian government’s intention to curb hydrocarbon production for environmental reasons in the face of the global climate crisis.
The Colombian president, Gustavo Petro, and his Minister of Mines and Energy, Irene Vélez, assure that no new hydrocarbon exploration and exploitation contracts will be signed, a decision that, If it materializes, it will affect foreign exchange earnings since crude oil is the country’s main export product..
According to analysts, the capacity to pay the debt is measured by the generation of income and if these drop, as could happen if the hydrocarbons industry slows down, the country will have less room for maneuver to meet its international obligations, which which will end up affecting investor confidence and further weakening the national currency.
With information from EFE