The Colombian dollar may return to an all-time high due to the US.

Stock markets around the world remain between fear and expectation that currently threatens investor confidence due to the fundamental decision to be taken this week in the United States, and although it is imminent, many are considering its severity. who will arrive.

This is the new rate hike for the month of September announced by the Federal Reserve, the issue in which not even the dollar escapes uncertainty and threatens new highs around the world, even as this currency is raised to new highs in Colombia.

Although the official currency of the United States currently fluctuates between 4,200 and 4,400 pesos, experts do not rule out that the announcement coming from the Federal Reserve will fuel fears of a recession and subsequent demand for this well-deserved currency. It is worth noting that it is an active shelter in times of crisis.

According to the Colombian Stock Exchange, this coin opened in the market on Monday, September 19, with an initial value of 4,436 pesos and ten cents, just 26 cents above the market representative price set today by the FSA at 4435.84, After the previous days of strong increases last week.

It should be remembered that last week, the dollar rose by 73 pesos with 95 cents this week, considering that last Monday, September 12, it closed at 4361.25, after breaking the negative line that it was. According to analysts, these results come as a result of the tense calm prevailing in the stock markets, where there is an urgent need for good news in terms of inflation, interest rates and exports.

For Juan Eduardo Netes, analyst at Credicorp Capital, these days will be a day full of great expectations and fear.while the Federal Reserve’s decisions on interest rates are known, after inflation in the United States fell less than expected in August and raised the specter of a recession in that country.

“It is very likely that there will be a very sharp rally, and that has triggered a sharp price hike, and that has sent prices down in the markets, with WTI down more than 2% and investors who are now in a risk-averse mode, Which makes us reverse the trend we had before on “inflation data,” this expert said.

At the moment, the historical maximum for the dollar in Colombia exceeds 4,600 pesos, the level it reached in mid-May, when it was affected by high inflation in the United States and the specter of recession in this country. Although it started declining after that, it did not return to 3,700 pesos before rising.

What about the Fed and interest rates?

The United States Federal Reserve (FED, the central bank) is ready to take a decision this week with a new and aggressive rate hike, determined to prevent current high inflation levels from consolidating and despite the risk of recession.

In August, prices rose more than expected on almost all items, from housing to food, Passing zero kilometers cars, which ended up convincing the board of directors of the need to take action. The Federal Reserve’s Monetary Policy Committee will begin trading on Tuesday and the following day will announce its decisions.

At 8.3% in one year, the rise in the inflation rate (CPI) slowed slightly thanks to lower gasoline prices, but it is still very high.

The world’s largest economy is showing signs of a timid slowdown in demand, especially in the real estate sector or even in manufacturing. But “as expected, the Fed will raise rates by 75 basis points again,” says Nancy Vanden Houten of Oxford Economics.

The monetary entity actually began to rise strongly in June, the largest since 1994, and did so again the following month. In total, rates since March have risen four times. Reference rates are currently between 2.25 and 2.50%.

The Fed is gradually raising it, in order to make credit more expensive for individuals and businesses Thus consumption and investment slows down. Its European counterpart, the European Central Bank, also dealt a blow to inflation in early September by raising interest rates by 75 basis points, unheard of since the euro was created.

* With information from AFP.

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