GTQ: Inflationary Pressures

Soaring inflation is forcing the central bank ( Banguat ) to raise interest rates, and we believe that further tightening will be the catalyst for upside in the quetzal. Although Banguat has historically intervened to purchase dollars in the spot market at around the GTQ7.5600/US$ level, inflation considerations may now take priority over currency competitiveness, and we would not be surprised to see long-term gains to GTQ7.0000/US$.

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