The Argentinean peso appreciates in the first days of the new exchange regime
Market Analysis by Quasar Elizundia, Expert Research Strategist at Pepperstone [ April 22, 2025]
“The Argentinian Peso strengthened against the US Dollar on Tuesday following the partial removal of long-standing capital controls and the launch of a new floating exchange rate band. The currency, now trading near 1,000 pesos per dollar, reacted to the government’s unexpected shift from a crawling peg system. While this adjustment may result in short-term volatility, it marks a structural step toward normalising market operations and stimulating foreign investment.
Meanwhile, the latest Consumer Confidence Index held steady at 44.10 in April, showing resilience after earlier gains. Durable goods sentiment surged by 184% year-on-year, which could suggest some optimism. However, the ongoing decline in macroeconomic expectations may cap the peso’s upside.
Adding to economic uncertainty, the Leading Indicator fell 2.1%, suggesting underlying weakness in economic momentum. The probability of exiting the current expansion phase rose significantly to 42.86%, underscoring broader fragilities.
On the bright side, the IMF revised Argentina’s growth upward. In contrast, it cut its projection for Latin America to 2%, citing trade tensions, tighter financial conditions, and weaker outlooks for Brazil and Mexico. However, if these downgrades spill over through trade ties, Argentina’s public accounts could face renewed pressure.
Looking ahead, markets will monitor inflation data and the pace of currency band adjustments to assess the sustainability of Argentina’s new economic path.”
