Argentina's Peso is going places!

You may not have noticed the exciting developments in Argentina’s currency market! The USDARS was trading at 1065 as recently as 22 April 2025. That means one US Dollar will buy 1,065 pesos. The Peso then lost ground rapidly, trading at 1474.50 on the morning of 22 September 2025. So, in the last 5 months, the currency had lost over 38% of its value against the US Dollar. But then, the US Treasury, led by Secretary Scott Bessent, publicly committed to providing robust financial support to Argentina, including a potential $20 billion currency swap line and direct purchases of Argentine sovereign bonds. This greatly reassured markets about Argentina's USD liquidity, lowering the perceived risk premium and boosting investor confidence. The result: USDARS fell from 1474.50 to 1325 at the time of writing, a move of over 10% in just 3 days! Wow. I mean WOW!

Take a look at these charts below, and you will see what I mean.

To give some credit to the Argentine Government, they temporarily suspended export taxes on key agricultural products through October to stimulate dollar inflows, improving the foreign currency supply and easing pressure on the Peso. Argentina’s Central Bank and Treasury actively intervened in spot FX markets and used reserve management to smooth liquidity spikes, curbing forced selling and stabilizing the Peso’s trading band. Amidst political uncertainty given the looming midterm elections in Argentina, the offer of support from the US triggered massive short-covering, ending the panic selling that had caused the nearly 40% loss I mentioned earlier.

That’s it for now, folks!

In case you didn’t know, I have been deeply involved in the forex markets for several decades, and the story in this link might be of some interest to you!

Ciao!

PS: The image you see at the top is a picture of yours truly at Perito Moreno Glacier in Argentina