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The peso (20.47 vs. dollar) and reference rate in Brazil

The Mexican peso closed the session with a depreciation of 0.40% or 8 cents, with the exchange rate trading around 20.47 pesos per dollar, after reaching a maximum of 20.6221 pesos, a level not seen since March 31.

During the overnight, the exchange rate faced upward pressure, as speculation continued on the Federal Reserve and its monetary stance.

It should be remembered that yesterday, after the monetary policy decision, the market interpreted the statement and the comments of its president, Jerome Powell, as a sign that the central institution could moderate its flexible stance sooner than previously believed.

As the statement was published in the afternoon, when most of the markets had already concluded operations, its effects extended to today’s session, mainly during the Asian and European sessions.

Thus, in the foreign exchange market, the dollar strengthened against its main crosses, with the exception of the Brazilian real (+ 0.62%), the Japanese yen (+ 0.39%) and the Russian ruble (+ 0.34%), which were the only ones three currencies in the wide basket of 31 main crosses to close in positive territory.

The dollar weighted index strengthened 0.57% and accumulated an increase of 2.07% in the last five sessions, reaching its highest level since April 13.

The mexican peso

It is important to mention that as liquidity returned to western markets, the peso gave up part of its losses to stabilize at closing levels.

The local currency was favored by a carry-over effect of the Brazilian real, which ranked as the most appreciated currency in the wide basket of main crosses and reached its best level since June 2020, after the Central Bank of Brazil increased its rate benchmark at 75 basis points, maintaining a cautious tone.

In the session, the euro touched a low of 1.1892 and a high of 1.2006 dollars per euro. For its part, the euro peso touched a minimum of 24.2308 and a maximum of 24.6055 pesos per euro.

At the closing, interbank prices for sale were at 20.4680 pesos per dollar, 1.3920 dollars per pound and 1.1902 dollars per euro.

 

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE

 

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