The U.S. dollar hovered one year-high, supported by steady Treasury yields and growing optimism surrounding the U.S. economy.
Higher Treasury yields have contributed to supporting the dollar’s ongoing strength.
This bullish outlook for the greenback is expected to persist in the near to medium term as the Federal Reserve’s take a more cautious approach.
However, the dollar’s appreciation poses challenges Latin American economies, including Mexico, Colombia, and Chile. Rising costs of servicing dollar-denominated debt strain public and private sectors, while depreciation of local currencies risks deterring foreign investment and weakening investor sentiment.
Looking ahead, market participants are now focused on Federal Reserve speeches and key economic data, including manufacturing surveys and consumer sentiment data, which are likely to provide further insights into the direction of U.S. monetary policy. If upcoming economic data signals sustained U.S. growth, the dollar’s trend may strengthen further. For Latin American markets, this could exacerbate financial pressures.
