Dollar price in Colombia today, January 17

He Dollar This Wednesday its price closed higher registering $3,966.50. This represents an increase of $23.5 compared to Tuesday’s close, a change of 0.59%.

Representative market rate (trm) remains at $3,940.85.

The dollar remains highly dependent on decisions the United States Federal Reserve (Fed) may make regarding interest rates as they are linked to investment. That is, the lower these are, the more incentives will be created for business and hence, more greenbacks will circulate in the country, ending up in a cheaper dollar.

Added to this are geopolitical tensions, which could have an economic impact, especially in terms of logistics. These scenarios could generate uncertainty, resulting in increased appetite for safe-haven assets like the dollar, which could put upward pressure on its price.

At El Espectador we consulted several analysts about what to expect in the greenback’s behavior in the coming days, and this is what they said.

🌎 Economy of the United States

The United States economy is the variable that weighs the most on the dollar’s fluctuations. On Thursday, it was revealed that inflation in that country accelerated through the end of 2023, challenging market expectations that the Federal Reserve would soon start lowering interest rates.

The consumer price index closed 2023 at 3.4%, after the biggest rise in three months, according to government data. Monthly variation was also greater than expected.

Core inflation (which excludes food and energy prices) rose 0.3% in December from the previous month. In annual terms, the so-called underlying index rose 3.9%. Economists prefer the underlying indicator because they consider it a better measure of the inflation trend than the headline CPI.

“Inflation in the United States is stabilizing around 3%, above the Fed’s 2% target, which will lead the unit to keep rates on hold longer than expected and postpone the cut until the second half of the year. “Thus, the dollar will remain strong during the first half of the year and weak in the second half,” said analyst David Ballen.

Along these lines, Theodore Kahn, director of the Andean Region of Control Risks, said that “In these first days of the year we have seen that the US inflation report was higher than expected and this indicates that there is uncertainty in that key indicator, although it “The shortage is expected to continue.”

The premise regarding the price of the dollar is that the more greenbacks circulating in the country, the lower their value, therefore, what happens with the Fed will be decisive.

Much of the dollar’s performance is tied to the behavior of the economy that produces them, i.e. the United States.

Furthermore, geopolitical factors influence the currency. For now, “We are seeing a complex situation in the global economy in the Red Sea with attacks against commercial vessels forcing diversions, increasing costs. “There is also great concern about escalating conflict in the Middle East,” Kahn said.

And the national economy?

Investors – again, the ones who bring the dollars – always keep an eye on politics, to know what the Colombian economy looks like and whether it is appropriate to “jump into the water” with new productive projects. Therefore, regardless of ideology or political side, whatever is happening in the country has an impact on the value of the dollar as it can increase or decrease the inflow of currency.

💰Dollar price prediction

This year, the dollar is expected to remain relatively low, below the $4,000 barrier. It is likely, as experts have said, that the $3,800 threshold will be reached again. However, all of these forecasts are subject to change to the extent that changes are recorded in the world that could affect the reduction, such as the escalation of the conflict on the Ukraine and Gaza border in addition to other geopolitical tensions. And commercial.

For this coming week, experts have predicted a currency that could range between $3,900 and $4,000.

According to Olarte, people who think about investing in dollars need to analyze what they are going to invest in. First, “they have to make sure they are formal investments; Second, keep in mind that the returns offered by investing in dollars must compensate for the risk and uncertainty caused by the exchange rate or they may have in their mind that this is money that is going to stay out, i.e. Always think in dollars, not how much they cost when brought in.”

Diego Franco, head of investments at Franco Capital Asset Management, noted that “We believe that in the short term the market could reach $4,000 again, that would be our expectation. For those who invest in the dollar, at the current levels It is still advisable to purchase physical dollars partly through digital wallets or from foreign companies listed on the Colombian Stock Exchange.

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