Forex Investment and Currency Trading

In recent days, the USD/ARS moved quickly higher from 3.16 to 3.19 on the heels of strikes in the agricultural sector and concern regarding the prospect for a further move higher. Although the government will likely experience ongoing challenges, the probability of a sharp move higher in
USD/ARS is extremely low in the near term.
USD/ARS has drifted back towards 3.14 thanks to some intervention by the central bank (BCRA). In April, in order to offset a move higher in the currency pair, net central bank USD/ARS sales were $840mn. This compares to net central bank USD/ARS sales of $840mn in August [...]

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Argentina’s high vulnerability to a deterioration in the external sector will translate into sharper peso weakness in H2 as the seasonally strong harvest period in Q1 gives way to a worsening political environment and more difficult financing conditions for the remainder of the year.
A new inflation index introduced in Q1 in essence enables the government the ability to change weights for selected products on an ongoing basis and is likely to exacerbate under-reporting of inflation. We are concerned about more manipulation of economic data.
Deteriorating credibility in the government will continue to make more difficult access to financing. The sharp rise [...]

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