MNI: PBOC Net Injects CNY37.3 Bln via OMO Wednesday

MNI: PBOC Sets Yuan Parity Lower At 7.1843 Weds; -1.22% Y/Y

MNI BRIEF: Japan Nov CGPI Rises 3.7% Y/Y, Import Prices Drop

MNI BRIEF: Brazil Not Even Close To Fiscal Dominance - David

CORRECTED-MNI BRIEF: Brazil Inflation Rises To 4.87% In Nov

MNI China Daily Summary: Tuesday, December 10

MNI: JAPAN NOV CORP GOODS PRICE INDEX +3.7% Y/Y; OCT REV +3.6%

MNI: USDA: 2024/2025 CORN PRODUCTION EST 15.14B BSL

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

MNI EXCLUSIVE: EU-Mercosur Deal Close, But Likely Short-Lived - Officials

AUSTRALIA: 2025 Election Outcome Looking More Uncertain According To Newspoll

© 1982-2024 MNI. All rights reserved.
Terms | Privacy
Log Out
Free Trial

Scotiabank Revise Year-End USDPEN Forecast Lower On Market Dynamics

PERU
  • Scotiabank have tweaked their year-end forecast for USDPEN, taking it from 3.85 to 3.78. This does not reflect a significant change in view on fundamentals but rather, an adjustment given recent market dynamics. The BCRP is showing quite a bit of tolerance to volatile swings in the currency this year, which would indicate that it was likely never convinced that the previous decline in the FX rate would be lasting.
  • Scotiabank’s forecast of 3.78 is a compromise between the new trend, and the limits that the BCRP is likely to put on the velocity of depreciation going forward. The sharp plunge to 3.54 on July 18th probably had an element of overshooting to it, which the BCRP may have recognized, and which helps understand the sharp rebound over the last few days. As the market turns, the PEN should return to more habitual levels, ranging in the vicinity of 3.70 to 3.80.
  • One more recent fundamental aspect that does provide support to our view of a depreciating PEN in the remainder of the year is the perception that interest rate cycle in the region will turn sooner and more significantly than in other regions of the world. This is also true for Peru, as we approach the date in Q4 when Scotiabank expect the BCRP to begin lowering its rate.
BulletEM BulletEmerging Market NewsHomepage
BulletEM BulletEmerging Market NewsHomepage

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.