Dollar in September: The City Projects How High It Could Rise After Recent Official Intervention

The wholesale dollar rose just 1.6% in August, in line with the projected inflation, and so far this year, it has increased 3.7% (+$53.50) against an accumulated variation of over 20%. Although there was moderately higher demand in August, the official intervention in alternative markets played a key role in preventing the acceleration of the currency's devaluation. Another crucial factor is the upcoming elections in 2027, which investors are beginning to scrutinize more closely.

Demand for pesos is usually low in September, which increases pressure on the dollar. Additionally, at the beginning of the month, savers buy foreign currencies to hoard, and credit card payments are made, which maintain relatively high demand at the start of the month.

In this regard, operator Gustavo Quintana pointed out to Ámbito that "inflows from abroad remain at an interesting volume, but there is a noticeable higher level of payments abroad for dividends and profits, which has slightly unbalanced the market."

For his part, Andrés Reschini from F2 Financial Solutions added that "aside from the increase in dollar demand due to seasonal reasons, there don't seem to be too many signals to suggest a jump in pressure on the dollar. If any such eventuality were to occur, I believe the Government has the ability to smooth out volatility."

"Private demand could remain relatively stable, unless there are negative political signals. This is because the electoral timeline is accelerating, leading to uncertainty about that process," added economist Gustavo Ber.

For Federico Glustein, "in September we will have lower demand than in August due to capital outflows for tourism and externalization, but we are starting to deepen the dollarization of portfolios ahead of the election year. We have pesos circulating in the market, providing some liquidity that can, on one hand, accompany the rate drop, but also cause those pesos to prioritize a harder positioning, at the expense of a decline in carry that is starting to be noticed, which would lead to an increase in demand for options linked to the dollar or tied to the movement of the North American currency's exchange rate," he analyzed.

During August, the official intervention was seen in both futures and dollar-linked instruments, the latter in the lead-up to the "fixing" on August 27. In this sense, Quintana highlighted that the moderate rise in the exchange rate was largely explained by these official interventions in alternative markets and emphasized that it will remain in the next two weeks, at least. In the 31 days of the eighth month of the year, the currency climbed $23.50 (+1.6%).

"Any increase in the dollar price encourages greater demand, which tries to anticipate higher increases and, at the same time, stimulates retention from those who have it to sell for the same reason. It's difficult to make forecasts, but I don't believe there will be significant changes in the current scenario or spiraling price increases," the operator emphasized.

On the other hand, Reschini stated that "the dollar continues to drive the energy sector's supply, and better commodity prices from agriculture are added to this, so I don't see any shocks on the horizon in September."

"A gradual slide of the dollar, at the pace of inflation, could be appropriate at this stage, aiming to maximize the level of purchases by the BCRA to strengthen reserves, but without undermining the goal of slowing down prices," Ber stressed.

"The political issue plays its role, and if the Government loses some legislative battles or makes management errors, it could fuel the demand for dollars, although not with a potential run, but rather with some cents higher," Glustein pointed out.

Reschini found it difficult to specify how high the dollar could go in September, although he noted: "I believe the Government seeks not to appreciate the currency further. Therefore, what happens with the currencies of the main trading partners comes into play. If it succeeds and there are no surprises, I don't see it above $1,550. But, I insist, what happens abroad also matters. There is Brazil, which is the main trading partner and is in the middle of a presidential campaign with a divided scenario. This is a factor that could inject volatility."

For his part, Glustein projected for September a wholesale dollar of "between $1,540 and $1,570 on average for the month."

The wholesale dollar would fluctuate between $1,490 and $1,520 during September, according to Quintana.

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