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The peso (20.04 vs. dollar) and monetary policy of the United States

The peso closed the session with a depreciation of 0.37% or 7.4 cents, trading around 20.04 pesos per dollar, with the exchange rate touching a minimum of 19.8848 and a maximum of 20.1937 pesos per dollar.

With the above, the Mexican peso loses for the third consecutive session, accumulating a depreciation of 1.72% or 33.9 cents.

Mexican peso

The depreciation of the Mexican peso during the day was due to the following reasons:

First

The perception of risk about Mexico rose momentarily after the president of Mexico said in a conference in the morning that he will send three proposals for constitutional reforms:

An electrical reform to strengthen the Federal Electricity Commission.

An electoral reform to «give independence to the electoral processes», although he did not specify what this possible reform consists of, the signal that is sent to the markets is of risk for the stability of future democratic processes

In addition, a reform to incorporate the National Guard into the Secretariat of National Defense.

The session’s maximum of 20.1937 pesos was reached during the morning, after the president’s comments.

Second

The anticipation of the Federal Reserve‘s monetary policy announcement scheduled for tomorrow at 1:00 p.m.

It is likely that inflation expectations in the United States will be revised upwards, the gradual exit from the bond purchase program will begin to be discussed, and expectations will be advanced for the first increase in the interest rate from 2024 to 2023.

Therefore, the dollar weighted index closed with an advance of 0.10 percent.

The Mexican peso closed as the sixth most depreciated currency in the wide basket of main crosses.

The most depreciated were the Colombian peso with 1.65%, the Chilean peso with 1.17%, the Turkish lira with 1.04%, the Hungarian forint with 0.43% and the Canadian dollar with 0.36 percent.

Other currencies

From a technical point of view, the exchange rate is likely to be in a channel between 19.90 and 20.20 pesos per dollar in the short term, moving mainly based on foreign news and speculation about the future of monetary policy. in United States.

In the session, the euro touched a minimum of 1.2101 and a maximum of 1.2147 dollars per euro.

For its part, the euro peso touched a minimum of 24.1378 and a maximum of 24.4789 pesos per euro.

At the close, the interbank quotes for sale stood at 20.0380 pesos per dollar, 1.4083 dollars per pound and 1.2129 dollars per euro.

 

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE

 

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