Steady Gains

January 2005 | Currency Forecast

The quetzal has strengthened through our upside target of GTQ7.800/US$, having seen a gentle but sustained appreciation throughout 2004 from GTQ8.100/US$ at the beginning of the year. We see this trend persisting over the coming year, as the economy's medium term prospects appear favourable and rising interest rates are likely to attract speculative investment. The central bank's spot market intervention will probably prevent a more dramatic rate of appreciation, and the unit is likely to face tough resistance at around the GTQ7.600/US$ level.

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