One of the effects of the economic recession caused by the COVID-19 pandemic is that the world is inundated with dollars.
The Federal Reserve of the United States (FED) -cuya mission is to control the monetary policy of the country as it does all the central banks- drastically reduce the interest rate hasta dejarla cases at 0%.
And as the equal interest rate at the expense of the money of a country, while more meager, less valuable in the division.
In parallel, the Fed the day ends with the impression of tickets to buy bonuses (both in the private sector as in the public sector), with the aim of mitigating the effects of the crisis.
So much so, that 2020 is the year in which more dollars will be printed than ever before.
This injection of money permits to finance the increase of the tax guest and the oxygen in the markets.
However, at the same time, the value of the dollar in front of the world will be reduced to the main currencies of the world in the last 10 months.
It is possible to observe in one of the indices that follow the evolution of the division, the Bloomberg Dollar Index (BBDXY), which has a maximum of 1,300 points on March 23.
And here it is, starting with a story that has not been released until now, as the graphic master.
If a step is taken above 12% in the last 10 months (a percentage that can vary slightly according to the index that is used to follow the evolution of the division).
Currently it is at its highest level since the start of 2018 and many experts agree that the world will be declining.
“El dólar seguirá cayendo”
“El desplome del dólar recién comienza”, lies the dice of BBC Mundo Stephen Roach, professor at the Universidad de Yale and president of the inverted Morgan Stanley and Asia.
The academic predicts that the division will receive more than 35% fines from this base in three large reasons.
The first is that there has been an increase in the current deficit of EE.UU., it is said that the country pays more externally through the exchange of markets, services and transfers of what it receives.
His projection is that this deficit will impulse a bay of the division.
Roach predicts that the Federal Reserve will have a lot to do to avoid the dollar’s downfall.
The second reason is the alza del euro, according to which the governors of Germany and France agree on a package of tax incentives, in addition to the issue of bonuses.
And thirdly, Roach predicts that the Federal Reserve will be very careful to avoid the dollar’s downfall.
With United States each having more dependent capital to compensate for its recent domestic deficit, it explains, and with the policies adopted by the Fed creating a massive excess of tickets, “in the event of a further devaluation of the dollar. que nunca “, argumenta.
In relation to the effects that a depreciated dollar has in emerging markets (such as Brazil, Mexico, Argentina, Colombia, Peru or Chile in Latin America), the plant expert who can get algae in some of the balls of these countries.
While acknowledging that the Federal Reserve has no interest in doing so, it’s Roach’s going to close, “the dollar’s shortage of debt will provoke increases in foreign exchange markets in general and in the actions of emerging markets in particular“, explains.
“No hay not exagerarlo”
Sondeverbod, other economists argue that if the division were to be a bit dumb this year, in no case have you hoped for a degree.
“I do not know how to exaggerate the dollar chain”, wrote the letters of January Mark Sobel, president of EE.UU. of the Official Forum of Monetary and Financial Institutions (OMFIF for its English Seals), on the website of the Center for Studies.
His posture is that he has a perspective in the atmosphere “very depressed“para el dólar.
“It is possible that the dollar will pay off this year, but a negative narrative will not be justified”, double mark Mark Sobel.
“It is possible that the dollar will pay off this year, but a negative narrative will not be justified,” said Sobel.
One of his arguments is that the dollar has had a solid fall (13% in 2020 since its peak in March).
Otro, is that in the middle of the global incubator, it is not safe to say that the inverse preferences correct risks y apostar por otras monedas que no sean el dólar.
At the same time, the economist also considers that pueden has relatively favorable monetary conditions in EE. UU. and that the actual cycle of a dollar fort, is simply lying to its end.
Effects in Latin America
In the region the bay of the dollar llego with rezago in comparison with other parts of the world.
One of the reasons that explains this demarcation in front of us in the months leading up to the Latin American economy is that it is its most dangerous, as explained by Diego Mora, senior executive of the XTB consultant.
However, although the division is caying, the region is in demand due to its refuge quality as long as it lasts.
“The depreciation of the dollar in Latin America begins to rise as early as five months”, Mora comments in a dialogue with BBC Mundo.
Mexico is the country where it has depreciated the dollar, followed by Chile, Colombia and Brazil.
Analyzing the region’s largest economies, the analyst says that Mexico is the country where most have depreciated the dollar, followed by Chile, Colombia and Brazil.
The consequences of the diploma vary depending on the economic actors.
For a lot, Latin American consumers benefit – despite the expert- because many of the goods that are consumed are imported, for example, cars and technological products.
Without embarrassment, history is not so simple, because at the same time he provided the prices of some of the first foods, he advised.
The corn, the trio, the cocoa and other products that are of primary necessity, he has kept superiors at 30% due to the depreciation of the dollar.
Hakan Aksoy, senior portfolio manager at the Amundi company, explains that with the dollar the most debilitating, it hopes that the prices of the prime materials will increase, as well as benefit Latin American countries.
On the other hand, a dollar more debilitating means having a more flexible fiscal and monetary policy in EE. UU., Le gambles a BBC Mundo.
Asi las cosas, “emerging lands can be more easily performed, which helps its external financing needs “, Aksoy said.
All in all, it is positive about crime and the perception of risk from investors.
The consensus among analysts is that given the differences between countries, the depreciation of the dollar has the most benefits that are expected for the region.
The consensus among analysts is that given the differences between countries, the depreciation of the dollar has the most benefits that are expected for the region.
“A depreciated dollar is definitely positive for Latin American economies,” said Joseph Mouawad, Carmignac’s fund manager, specializing in emerging markets.
“A dollar bill comes with the highest prices of prime materials”, the BBC Mundo said.
In relation to the debt in dollars of Latin American countries, Diego Mora explains that, as a mayor has the share of the division in the world and the interest rates are low, the United States has less power to negotiate.
Enttones, “the debt in dollars of Latin American countries can be renegotiated to minor interest rates”. (I)