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The peso (19.73 vs. dollar), inflation and elections in Mexico

The peso closed the session with a moderate depreciation of 0.10% or 2 cents, trading around 19.73 pesos per dollar, with the exchange rate touching a minimum of 19.5987 pesos, a level not seen since January 21 and a maximum of 19.7893 pesos. .

Peso

The performance of the exchange rate during the session is divided into two parts:

First

During the morning, the exchange rate approached the minimum levels in the year as the perception of risk continued to decrease for the third consecutive session, after the results of the federal elections held on Sunday.

The exchange rate touched the low of 19.5987 in the hours after the May inflation was published, which stood at 5.89%, slightly above market expectations, showing upward risks in merchandise prices within the country. underlying component, particularly food commodities.

The foregoing raises the expectation that Banco de México o will continue to be cautious in the conduct of its monetary policy and it is probable that in its announcement of June 24, it will continue to indicate that the balance of risks for inflation is biased upward.

Second

With the progress of the session, the dollar began to recover ground to close with an increase of 0.05 percent.

The foregoing is an adjustment in anticipation of inflation in the United States corresponding to May that is published tomorrow at 7:30 am.

If an annual inflation data is published above the market expectation of 4.7%, a further strengthening of the US dollar could be observed.

It should be remembered that the foreign exchange market has remained stable for three consecutive sessions due to the scarcity of relevant economic information, so that the inflation data on Thursday morning could cause an increase in volatility.

Banxico and SHCP

On the other hand, this afternoon the President of Mexico announced that Rogelio Ramírez de la O will be the new Secretary of the Treasury, replacing Arturo Herrera who is expected to be officially nominated to occupy the position of Governor of the Bank of Mexico from January 1, 2022.

The exchange rate showed moderate upward pressure after the announcement, but this loss was erased minutes later.

In the session, the euro touched a minimum of 1.2171 and a maximum of 1.2218 dollars per euro. For its part, the euro peso touched a minimum of 23,9094 and a maximum of 24,1014 pesos per euro.

At the close, interbank quotes for sale stood at 19.7260 pesos per dollar, 1.4112 dollars per pound and 1.2177 dollars per euro.

 

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE

 

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