An Uninspiring Picture

August 2005 | Currency Forecast

The gentle but sustained rally of the quetzal, which strengthened by 6% since the start of 2004, has come to a conclusion. As we suggested in our January forecast, the unit met resistance at around GTQ7.580/US$ in April, and has since been restrained at this level by central bank dollar purchases. Further gains are likely to be limited in the near term, and in the context of a relatively weak economy, we do not expect the unit to come under significant upside pressure over the coming months.

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