Peruvian sol holds steady at 3.446 per dollar

The Peruvian sol closed on Friday, October 9, at 3.446 per US dollar, barely changed from 3.445 in the previous session with a slight gain of 0.03%. During the day, the exchange rate traded between 3.444 and 3.460 soles per dollar amid broader international strength in the US currency.

The US Dollar Index (DXY) rose 0.13% to 102.3 points, heading for its fourth consecutive week of gains. Jorge Luis Huayta, FX trader at Kambista, stated that this strength was supported by expectations of elevated interest rates and uncertainty regarding inflation. US Treasury yields remained high, with the 10-year yield at 5.248% and the 30-year yield at 5.605%.

In commodities, WTI crude oil rose 0.05% to $92.46 per barrel, while metals advanced. Gold gained 1.54%, silver rose 2.90%, and copper increased 2.40%. Among major currencies, the euro fell 0.08% and the Japanese yen dropped 0.24%, while the British pound rose 0.08%.

In the local market, trading volume reached $585.1 million. Demand for dollars from offshore agents and pension funds (AFPs) was offset by supply from corporate firms and the Central Reserve Bank of Peru (BCR), which opted not to renew an FX sale swap. The BCR also maintained its benchmark interest rate at 4.25% for the thirteenth consecutive month, contrary to expectations from nine out of thirteen analysts surveyed by Bloomberg who anticipated a hike to 4.50%.

Market participants are now watching for US September inflation figures ahead of the Federal Reserve rate decision scheduled for October 27 and 28. Higher-than-expected inflation could push the dollar toward 3.470 to 3.490 soles, while a moderate figure could bring a correction toward 3.420 to 3.430 soles. In Peru, upcoming economic indicators include GDP data and the start of corporate tax payments.