The peso depreciated against the dollar to 19.92 units

The peso closed the session with a depreciation of 0.25% or 5 cents, trading around 19.92 pesos per dollar, with the exchange rate touching a minimum of 19.8123 and a maximum of 19.9240 pesos.

The depreciation of the peso occurred alongside most of the currencies of Latin American economies, such as the Chilean peso, which depreciated 0.66%, the Brazilian real with 0.34% and the Peruvian sol with 0.33 percent.

Likewise, the depreciation of the Chilean peso is due to speculation of adjustments in local investment portfolios, while in Brazil the real showed a correction to the appreciation of 0.89% in Monday’s session and in Peru, the sol depreciated due to the associated uncertainty to the presidential elections on June 6, as the leftist candidate Pedro Castillo continues to have an advantage in the polls.

Although the depreciation of the Peruvian sol was moderate, today the parity reached a historical maximum of 3.8479 soles per dollar.

The mexican peso

It is important to mention that the depreciation of the peso also responds to a technical movement, after the exchange rate was close to the support of 19.80 pesos per dollar during the early hours of the morning.

This support has not been able to be pierced with force, being the last time that this occurred the sessions of May 17 and 18, when the exchange rate touched the minimum in the month of 19.7197.

Moving forward, although there are factors that may allow the peso to appreciate, such as the expectation of a cautious monetary policy by the Banco de México , there are also factors that promote depreciation, such as political uncertainty in Latin America (particularly in Peru, Colombia and Chile), the uncertainty associated with the policies of the federal administration in Mexico and the federal and local elections of June 6.

During the first quarter, the current account showed a deficit of 1.7% of GDP, below the deficit of the first quarter of 2020 of 2.5 percent.

FDI

Inside the financial account, the foreign direct investment (FDI) in Mexico stands out, which was 11,864 million dollars, equivalent to an annual fall of 29.2%, being the largest fall for the same quarter since 1995.

Net FDI, which discounts the investment of Mexicans abroad, had an annual fall of 35.2%, the highest since 2009.

It is worth mentioning that today the Federal Aviation Administration of the United States (FAA for its acronym in English), announced that the government of Mexico does not comply with the security criteria of the International Civil Aviation Organization, thus degrading the rating. of Mexico from category 1 to 2.

According to the FAA, Mexican airlines may continue to offer services to the United States, but no new routes or flights may be opened.

For their part, US airlines will not be able to sell tickets with their name and codes on flights operated by Mexican airlines.

This could affect the recovery of tourism during 2021, which still shows a significant lag given the slow reactivation of the service sector in Mexico.

In the session, the euro touched a low of 1.2212 and a high of 1.2266 dollars per euro. For its part, the euro peso touched a minimum of 24.2490 and a maximum of 24.4065 pesos per euro.

At the close, interbank quotes for sale were 19.9180 pesos per dollar, 1.4148 dollars per pound and 1.2248 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

BASE bench