The Argentine peso will weaken even further in the coming months as skepticism over the government's ability to tame inflation and plug a budget deficit limit the impact of a deal with the International Monetary Fund (IMF), a Reuters poll showed.
The peso is likely to plummet about 19 percent to 47 to the dollar in 12 months, according to the median of 13 forecasts from currency strategists and economists. That is a sharp change from last month's poll, which predicted the peso would strengthen to 34.135 in a year, underscoring how the intensity of the recent sell-off caught market observers by surprise.
All seven forecasters who participated in the previous survey revised their most recent estimates to show a weaker peso. This was by far the largest revision among strategists
polled by Reuters about six Latin American currencies.
The Mexican peso, which has also been volatile during talks to renew the North American Free Trade Agreement, is set to strengthen to 18.835 in a year, just a hair away from the 18.77 predicted in August's survey.
By comparison, Goldman Sachs slashed its outlook for the Argentine currency by over 25 percent, and in a client note acknowledged "significant risks given uncertainty around the fallout from the difficult macro adjustment ahead, along with the associated political and social costs."
The poll results highlight how Argentina's financing deal with the IMF may at most cushion the currency but will not solve the profound macroeconomic imbalances driving it lower.
The peso is down more than 50 percent this year and is one of the world's worst-performing currencies as investor optimism has soured over President Mauricio Macri's plan of gradual adjustments.
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