The peso depreciates against the dollar at 20.21 units

The peso closed the session with a depreciation of 0.26% or 5.2 cents, trading around 20.21 pesos per dollar, with the exchange rate touching a minimum of 20.1464 and a maximum of 20.3270 pesos per dollar.

The Mexican peso resumed its losses along with a generalized 0.29% strengthening of the US dollar, according to the weighted index, as the perception of risk in global financial markets rose.

Mexican peso

Above all, the strengthening of the dollar was mainly due to two factors:

First factor

Greater caution in global financial markets. Significant losses have been observed in the capital markets since the European session, with the main indices falling on average 1.9%, while Germany’s DAX fell 2.49 percent.

The falls deepened in companies in the technology sector, which in Germany fell on average about 4.01 percent.

It should be remembered that issuers in the technology sector were favored by a change in consumption patterns during the pandemic, allowing capital markets to reach new all-time highs.

However, the process of normalization of consumption during the second quarter represents a challenge for the upward trend of these stations, which encourages profit-taking episodes as happened today.

In the United States, the S&P 500 lost 0.67%, while the Nasdaq fell 1.88%, falling in five of the last six sessions in which it accumulated a loss of 3.57 percent.

It should be noted that other big losers during the session are companies in the automotive sector, whose component in the S&P 500 fell 1.87 percent.

German company Infineon Technologies AG, a semiconductor maker, noted that about 2.5 million cars will not be produced in the first half of 2021 due to remaining shortages in the supply chain.

Second factor

A return of speculation about possible increases in the interest rate in the United States.

According to an interview by Treasury Secretary Janet Yellen, published this morning, interest rates may need to rise to avoid an overheating of the economy, a condition in which rapid economic growth raises aggregate demand. at a rate that cannot be matched by supply, generating inflationary pressures.

The exchange rate touched the session high of 20.3270 in the minutes after Yellen’s comments were posted.

Foreign exchange

Despite Yellen’s comments, interest rates in the bond market remained stable, with the 10-year Treasury rate ending the session down 1 basis point at 1.59 percent.

In the foreign exchange market, the most depreciated currencies were the Turkish lira with 0.91%, the New Zealand dollar (-0.82%), the Swedish krona (-0.71%), the Australian dollar (-0.67%) and the Norwegian krone (-0.66 percent).

The most appreciated currencies were the Russian ruble (+ 0.39%), the Chilean peso (+ 0.30%), the Brazilian real (+ 0.23%) and the Indonesian rupiah (+0.14 percent).

These last currencies were driven in part by increases in the prices of some raw materials, such as oil with the WTI advancing 1.88% in the session and copper, which advanced 1.40%, to close at 9,966.75 dollars per metric ton, close to the maximum $ 10,000 historic.

In the session, the euro touched a low of 1.1999 and a high of 1.2065 dollars per euro.

Finally, the euro peso touched a minimum of 24.2457 and a maximum of 24.2457 pesos per euro.

At the close, the interbank quotes for sale stood at 20.2130 pesos per dollar, 1.3891 dollars per pound and 1.2017 dollars per euro.

 

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE