Financial News

Thus, the Argentine peso joins the rest of the Latin American currencies that will remain under pressure in the coming months. They will continue under pressure the currencies of the region? Can be expected that the Latin American currencies continue appreciating against the dollar? Beyond continuity expected in the flow of capital into the region (which can even be accelerated before the improvement expected in the context), there is an element that will generate them more pressure in the coming months and is linked to the management of international reserves of China policy. From the Government of China there is convinced about the need to increase the participation of other currencies within the composition of international reserves to reduce its exposure to the U.S. dollar. In this way, both the euro and the yen are the two currencies that have all the chances to increase its percentage in the total number of China’s international reserves. To have a idea of the extent to which we are referring, is worth mentioning that by the end of September, China had international reserves by US $2.27 trillion, with a high percentage of them denominated in U.S.

dollars. And the American currency has already felt the impact of these rumors. Zhou Hai, China’s Central Bank yesterday believed in Financial News: euro and yen holdings should be increased to reflect the growing trade with the European Union and Japan. The dollar felt the impact in yesterday and stood at its lowest level in the past 14 months in 1,5061 towards dawn, the euro then immediately revert to climb to its highest level in a week coming to the 1,4844 per dollar. Which generated fall in commodity markets and boosting the low stock yesterday on Wall Sreet. The U.S. economy nor offers solid grounds for thinking that the dollar can recover value in the coming months, by what its relationship with Latin American currencies will continue to weakening. Different elements of the international economic environment are key to being able to anticipate and predict where the Latin American currencies will behave.

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