USD/ARS: Argentinian peso avoids new record low, but remains under pressure

The Argentine peso was unable to recover part of the lost ground on Tuesday and dropped again, more moderately, showing small signs of stabilization, significantly below the level it had a week ago. 

Argentine equity indexes were up by more than 5%, a minor rebound considering that on Monday stocks lost on average 37% of its value, a historic decline. The reaction followed the results of the primary election. President Macri lost by a much larger than expected margin against Peronist/Kirchnerist Fernández, who is likely to win the presidency in October, becoming president on December 10. 

The USD/ARS pair closed last week around 45.00, and it peaked at 62.00 on Monday before pulling back to 52.80 where it closed yesterday. Today ended at 55.60, up 5%. The positive development is that it remained far from the 60 area and also from Monday’s top. 

Still, Argentinean assets remain under pressure as the political en economic environment show extreme levels of uncertainty. Today, most emerging market and commodity currencies finished higher against the US dollar boosted by an improvement in risk sentiment following the announcement of US authorities to delay the introduction of some of the additional tariffs on Chinese imports.