ARS: Devaluation Talk Overblown

May 2008 | Currency Forecast

Our short-term outlook for the Argentine peso remains unchanged despite the heightened activity in the exchange rate market - we still anticipate choppy range trading within the ARS3.1200-3.1900/US$ area. With individuals and businesses shifting out of pesos amid fears of a financial crisis, triggered by the dispute between farmers and the government, the main risk is that a devaluation may occur in the short term.

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