Argentina’s Peso Pauses as Merval Leaders Shine and Laggards Struggle

Argentina’s central bank released today’s official USD/ARS rate at 1,469 per dollar, while the parallel blue rate hovered near 1,550.

The peso’s 5.6% premium underscored persistent demand for hard currency after yesterday’s provincial election setback for President Javier Milei’s party.

The dollar index eased to 96.72, driven by softer Fed rate outlooks. Local equities rebounded sharply. The S&P Merval closed at 1,788,269 points, up 2.26% on volume of ARS 2.1 billion.

YPF led gains with a 6.2% rise to ARS 40,980. Pampa Energía jumped 7.9% to ARS 3,640. Celulosa Argentina surged 9.7% on technical relief buying. Grupo Financiero Galicia and Transportadora de Gas del Norte added 4.1% and 3.5%, respectively.

Banks and property developers lagged. Banco Macro fell 1.8% to ARS 9,450. BBVA Argentina lost 1.5% to ARS 780. IRSA Inversiones Inmobiliarias dipped 1.2% to ARS 18.20. Telecom Argentina slid 1.0% to ARS 15.45. Tenaris declined 0.9% to ARS 19,300.

Daily technical indicators highlighted mixed signals. The 20-day Bollinger Bands narrowed around USD/ARS, suggesting declining intraday volatility.

The 50- and 200-day simple moving averages on the peso chart formed a bullish crossover two sessions ago, but the price stalled near the upper band. The RSI on the four-hour chart hit 71.3, signaling overbought conditions before retreating to 63.2.

MACD on the daily chart showed a rising histogram and a bullish signal line crossover, hinting at further peso weakness ahead.

Ichimoku cloud analysis on the Merval chart revealed the index trading above its cloud with future span A above span B, marking a short-term bullish trend despite the broader downtrend on higher timeframes.

ETF flows reinforced caution: the Global X MSCI Argentina ETF recorded outflows equivalent to 10.6% of assets last week. Foreign investors maintained underweight positions amid political uncertainty.

Central bank reserves remained under USD 9 billion, limiting direct intervention. Instead, authorities used overnight repos and dollar futures to stabilize the market.

Regional peers outperformed. Brazil’s real strengthened 0.3% against the dollar, while Mexico’s peso gained 0.2%, illustrating Argentina’s unique policy and political risks.

Seasonal dollar demand from agricultural exporters and the looming midterm elections set the stage for renewed peso pressure. If the official rate breaches 1,500, authorities may expand repo operations or adjust monetary policy to contain market stress.