Currencies rise after Fed actions, Peruvian sol leads gains

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Currencies rise after Fed actions, Peruvian sol leads gains

Lima – Short-term US Treasury yields and the dollar fell after the US Federal Reserve (Fed) decided to raise its interest rates by 0.50 points, leaving the target range between 0.75 % and 1%. With the dollar falling globally, most Latin American currencies appreciated at the close of the session.

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The Fed’s action, anticipated by the markets and which generated high expectations and volatility in various financial indicators -including the foreign exchange market-, seeks to reduce the risks of inflation and the increase in consumer prices that currently harms the North American country; while several countries in the world and in Latin America are also tightening their monetary policy to combat inflation and inflationary pressures.

Few were the currencies that fell this Wednesday. was the case of the Colombian peso (USD:COP)which depreciated 0.96% against the dollar pressured by the drop in the price of oil and while the local uncertainty due to the electoral period continues.

SUN OF PERU LEADS EARNINGS 🇵🇪

The price of the dollar in Peru (USD:PEN) fell 1.24%, closing the day at 3.77 soles per US$1 in the interbank market according to the Central Reserve Bank (BCR). So far in 2022, the sol has appreciated more than 6% compared to the US currency.

Until the closing time of the sun (1:30 pm), the Peruvian currency was the only one that scored gains compared to the dollar after learning of the Fed’s decision. It was then followed by the Brazilian real, which appreciated 0.85% at the end of the dayand the Mexican peso also appreciated, rising 1.18% compared to the average that the currency managed yesterday compared to the dollar.

The Chilean peso continues to recover although it is still far from the level of 800 pesos per dollar. The Uruguayan peso and the official bolívar also fell at the end of the exchange session.

Javier Bernaola, currency trader at Renta4 SAB, remarked that the Peruvian currency had appreciated since the beginning of the day while the currencies in the LatAm zone woke up mixed. There was demand for soles by offshore and mixed flowswithout relevant trading volumes; while banks cut their positions in dollars.

DOLLAR TODAY WEDNESDAY, MAY 4, 2022

💸 Currency ranking so far this year

Dollar TODAY Wednesday May 4, 2022: price of the dollar in Peru, Colombia, Chile, Argentina and Brazil.dfd

The Chilean peso maintains a negative performance so far in 2022 after the strong decline that the currency has had compared to the dollar in recent weeks. The rest of the currencies maintain the same positions in the ranking, with the Brazilian real still leading and the Uruguayan peso maintaining its strength as the second currency that has appreciated the most this year against the US currency in Latin America. In third place is the Peruvian sol.

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