Financial day: why the free dollar fell 10 pesos after last week’s climb

FILE PHOTO. A woman counts US one hundred dollar bills in Buenos Aires, Argentina. August 28, 2018. REUTERS / Marcos Brindicci

After three days on the rise, The free dollar cut $ 10 today and traded at $ 162, while the Central Bank managed to buy more than USD 40 million, according to market sources. In this way, and despite the strong escalation of the previous week, the ticket traded on the informal circuit began the week with a sharp decline, although it had started the day on the rise and reversed the half-day trend.

In the previous three days, the ticket that is obtained in the illegal market had risen $ 23, from $ 149 to $ 172, a level that began to worry in official spheres, but far from the record of $ 195 registered on October 23. With this fall the gap with the ticket in the wholesale segment fell to 106.4%, although before the last three days on the rise it had dropped to 84%.

According to the financial operator Christian Buteler, the fall in the free dollar price responded to market players who offered the currency some two pesos below what was being negotiated.

Today there were friendly hands in the market intervening. That was pretty obvious and made him go down hard. Some caves even decided to run so as not to get stuck at those prices”Buteler told Infobae.

“They appear at market moments with positions below the market value of that moment and with that they collapse the price. Today they appeared when they were at $ 173 selling at $ 171. That makes the price go down. What you have to understand is that it is neither a very large market nor a very transparent one. That is why it allows this type of handling ”, he analyzed.

For Matias Rajnerman, director of Ecolatina, it is important that it has been cut with the rise of the last days although he warned that the gap continues at very high levels anyway.

They appear at market moments with positions below the market value of that moment and with that they collapse the price. Today they appeared when they were at $ 173 selling at $ 171. That makes the price go down (Christian Buteler)

“The fall does not respond to anything specific. It does not seem to me that the global expectation for the results of the vaccines against Covid-19 has impacted on the parallel dollar market. It has to do with the restriction of liquidity. However, the gap remains at levels incompatible with the normal functioning of the economy”, He highlighted.

While for Natalia Motyl, economist at the Fundación Libertad & Progreso, the fall of the parallel dollar also responds to an increase in the remunerated debt to absorb that injection of pesos that was recorded during much of the pandemic period.

However, The exchange rate pressure does not stop despite a friendlier global context and the Government’s attempts to regain market confidence through the renegotiation of the agreement with the International Monetary Fund (IMF), questioned this weekend by a letter from pro-government senators that criticizes the role of the international body.

As for the quotes of financial dollars, The Cash Cash with Settlement (CCL) dollar advanced almost 1% to $ 147.61, bringing the gap against the official one to over 84 percent.

The force of demand, meanwhile, is felt in the financial prices of the currency. The Government accompanies the “signs in the right direction” with aggressive interventions in the bond market in an attempt to keep the prices that arise from trading with bonds and stocks at bay with liquidation and the MEP dollar.

While The stock market dollar or MEP operated with a rise of 1.2% to $ 142.92, and thus the gap with the wholesaler was established at 78.7 percent.

In the retail circuit, the dollar traded on average – according to the Central Bank survey – at $ 85.60 for sale. While with the addition of the PAIS tax and the 35% tax that can be deducted from Profits or Personal Assets, the price rose to $ 141.24, 57 cents more than on Friday.

In a day with an internal volume operated – it reached USD 296.2 million, 30% more than Friday-, the dollar closed in the wholesale sector, where the Central operates, at $ 79.97 per unit, 22 cents above last Friday’s close. An amount of that level had not been verified since the first days of October.

“The North American currency operated with rises directed by official interventions in a scenario of improvement in genuine supply. Prices always moved within the fluctuation range that the monetary authority set for the first day of the week, very limited by the Central Bank regulation, ”analyzed Gustavo Quitnana, operator of PR Corredores de Cambio.

“After several days with a negative balance due to its intervention, the Central Bank was able to obtain a recomposition of its holdings by absorbing surplus supply in the market”, added.

For Quintana, in a scenario of greater fluidity in the exporters’ income, the Central Bank “once again exhibited a net close to neutral for November, which temporarily dissipates the tension on the market, showing a result closer to official expectations.”

Merval and ADRs, on the rise

Local shares were infected by the good international climate and presented considerable increases in most of the companies. Within this framework, the S&P Merval index closed up 2.4%, reaching 51,084.91 units.

Among the stocks that led the gains today are those of Telecom Argentina (+ 7.6%), followed by Cresud (+ 4.7%) and YPF (+ 4%). Meanwhile, among the casualties, the falls in Sociedad Comercial del Plata (-1.4%); those of Cablevisión Holding (-1%) and those of Transportadora de Gas del Sur (-0.6%).

Among the shares of Argentine companies that are listed on Wall Street, they achieved greater increases in sectors lagged by Covid-19, while the banking sector ended with assets slightly in a mixed way.

The increases were led by IRSA Propiedades Comerciales with a rise of 22.9%, followed by Despegar (+ 11.8%) and Tenaris (+ 7.1%).

Source: Rava Bursátil

Source: Rava Bursátil

On the other hand, the political climate is once again tense because tomorrow there will be an important day in Congress as the new law on wealth tax is being debated in Congress.

The Country Risk closed at 1,321 points and hit minimums for several weeks ago and thus moves away from the more than 1,400 points in which it averaged in recent weeks.

Regarding the bond market, the main securities in dollars registered increases of up to 2.2%, confirming the trend that began two weeks ago.

The most notable increases were for: Bonar 2035 (2.2%); the Bonar 2030 (2%); and the Global 2046 (1.8%). Despite the good moment of the bonds, local traders warn that the climate of distrust is not completely dissipated, beyond the positive symptoms.

On Wall Street, the Dow Jones industrial index grew 1.6% and the Nasdaq technology index advanced 0.6 percent.

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