Despite the fact that the day started with a good rhythm, the Colombian dollar had a very negative day on Monday 13th June, losing part of what it had gained in its early hours and ending up even below its opening value, due to the volatility that plagued the national and international market.
According to the Colombian Stock Exchange, This coin started operations with an opening value of 4,010 pesos, nearly 100 pesos above the market representative rate (TRM) set by SuperFinanciera for the day, and in its first transactions it reached a maximum of 4,041 pesos and 90 cents.
However, the uncertainty that still prevails among investors, because of what could happen in the United States with the Federal Reserve and interest rates, which will rise again, after reaching a maximum inflation that we have not seen in 40 years, made that about 10 : 00 a.m. Its price began to decline, reaching a minimum of 3,965 pesos and 50 cents.
Similarly, according to BVC, the average cost of trading was 4,014 pesos, 35 cents and at the end of the day its last price was 3,971 pesos, Which shows that fluctuations are still in effect due to fear between investors, experts and analysts.
The Federal Reserve is looking for solutions to the scary inflation
In the face of unfavorable inflation in the United States And that one of President Joe Biden’s economic priorities, the US Federal Reserve will raise interest rates again on Wednesday, and the market is speculating on the size of the increase.
The Monetary Policy Committee holds its meeting Tuesday and Wednesday, and the market takes for granted an increase in reference interest rates by half a percentage point, similar to what was determined at the last meeting of the organization.
But many expect a stronger increase of 0.75 percentage points or 75 basis points, and that makes the markets unstable. If it does, it will be the first time since 1994.
“Markets are starting to take into account the risk of (up) 75 basis points during the meeting” this week, Scotiabank’s Sean Osborne told AFP.
The continuous increase in the cost of living around the world, Although it has the greatest influence in the United States, it continues to have powerful effects in all economies of the world, even affecting European and Asian stock markets and the Japanese yen.
The Japanese yen fell to its lowest level against the dollar since 1998 on Monday as rising inflation in the United States exacerbated the monetary policy gap between Japan and the world’s largest economy.
The Japanese currency has been weakening for months, accelerated by the strong monetary tightening of the Federal Reserve (the Federal Reserve, the central bank) of the United States Dealing with high inflation caused by the war in Ukraine and other factors.
European stock markets fell sharply on Monday, in the context of uncontrolled inflation in the United States, causing some panic in the bond market, as interest rates rose. The CAC 40 index in Paris lost 2.67%, while the Frankfurt Stock Exchange index lost 2.43%, to close its fifth consecutive session of decline. London lost 1.53% while Madrid’s Ibex-35 lost 2.47%.
European stock markets extended their losses after the start of the session on Wall Streetwhich has been marked by notable setbacks, by persistent inflation and fear of tightening monetary policy by the US Central Bank (FED).
US inflation hit a new high in May at 8.6% y/y, well above analysts’ expectations.
* With information from Agence France-Presse.