6 Apr 2015
Peruvian sol keeps the negative outlook – BAML
FXStreet (Edinburgh) - In the opinion of analysts at BAML, the perspective for the Peruvian currency remains on the bearish side.
Key Quotes
“We stay bearish on the Peruvian sol. We expect PEN to weaken to 3.20 by the end of 2015, with risks of an even larger depreciation”.
“Lower long-run economic growth potential, declining terms of trade and persistent current account deficits will keep putting pressure on the currency, which is still about 10% overvalued. For investors, we recommend short PEN/MXN”.
“We remain concerned with the dynamics of private sector confidence. Recovery in some sectors combined with well-implemented countercyclical policy should, in principle, be able to drive a growth recovery as long as private consumption holds up. However, the longer aggregate growth continues to underperform, the harder it will be for private consumption to remain high.
Key Quotes
“We stay bearish on the Peruvian sol. We expect PEN to weaken to 3.20 by the end of 2015, with risks of an even larger depreciation”.
“Lower long-run economic growth potential, declining terms of trade and persistent current account deficits will keep putting pressure on the currency, which is still about 10% overvalued. For investors, we recommend short PEN/MXN”.
“We remain concerned with the dynamics of private sector confidence. Recovery in some sectors combined with well-implemented countercyclical policy should, in principle, be able to drive a growth recovery as long as private consumption holds up. However, the longer aggregate growth continues to underperform, the harder it will be for private consumption to remain high.