The peso closed the session with an appreciation of 0.22% or 4.4 cents, trading around 19.69 pesos per dollar, with the exchange rate touching a minimum of 19.6507 and a maximum of 19.7768 pesos.
During most of the session, the exchange rate remained stable showing a lateral behavior around the level of 19.70 pesos.
The peso’s advance was driven by increases in the prices of raw materials, mainly energy, where the price of WTI rose 0.26% to 70.14 dollars per barrel, hitting a new high for the year of 70.65 dollars.
For its part, the price of aluminum advanced 0.71% and nickel 0.81 percent.
Commodities advanced after the unexpected weakening of the dollar with the publication of May inflation in the United States, which stood at 5% annually, above market expectations.
In the foreign exchange market, the dollar weighted index showed a 0.15% decline, while the most appreciated currencies were from emerging economies or commodity-producing countries, such as the Turkish lira with 1.94%, the South African rand with 1.00% and the Russian ruble with 0.70 percent.
It is important to note that despite higher inflation in the United States, the dollar weakened as the market speculates that the Federal Reserve and other central banks will continue to pursue broadly flexible monetary policy.
In the morning, the European Central Bank (ECB) reiterated that they will maintain the bond purchase program for a longer time, while Christine Lagarde, who is at the head of the ECB, said that exiting the current monetary stance early implies a risk for the Economic recovery.
Due to the expectation that the Fed will maintain its flexible stance, the interest rate on the 10-year Treasury bonds was also reduced by 4.8 basis points, standing at 1.44 percent.
From a technical point of view, the exchange rate has not shown a change in trend and has been for the second consecutive session at levels below the support of 19.70 pesos, so it is still likely that the exchange rate will continue to fall towards levels close to 19.55 pesos, minimum in the year.
During the session, the most depreciated currency was the Peruvian sol, which lost 1.35%, trading around 3.8950 soles per dollar.
This after the leftist candidate, Pedro Castillo, declared himself the winner of the presidential election with 99% of the votes counted and 50.2% of the votes against 49.8% of the opposition.
Due to the narrow margin, an official winner has not yet been announced and the right-wing candidate has requested to annul around 200,000 ballots accusing of fraud, so there is also a risk of episodes of political instability.
In the session, the euro touched a minimum of 1.2144 and a maximum of 1.2195 dollars per euro.
For its part, the euro peso touched a minimum of 23.9396 and a maximum of 24.0662 pesos per euro.
At the close, the interbank quotes for sale stood at 19.6913 pesos per dollar, 1.4178 dollars per pound and 1.2177 dollars per euro.
Gabriela Siller; PhD
Director of Economic-Financial Analysis.