The peso gains against the dollar influenced by Banxico

The peso closed the session with an appreciation of 1.09% or 22 cents, trading around 19.95 pesos per dollar, with the exchange rate touching a maximum of 20.2135 and a minimum of 19.9135 pesos.

With today’s appreciation, the Mexican peso completely erased Wednesday’s fall that was related to a general strengthening of the US dollar.

The appreciation of the peso was mainly due to internal factors, as it was recovering ground in anticipation of the monetary policy announcement of Banco de México, where the Governing Board kept the target interest rate at 4.00 percent.

The appreciation of the peso is due to the fact that the market anticipated a change in language from Banco de México to one of greater caution due to the upside risks for inflation.

This was confirmed in the statement, where the Governing Board indicated that the balance of risks that could affect the expected path of inflation on the horizon of its forecast is upward.

The mexican peso

It should be noted that the last time an upward risk balance was mentioned for inflation was on May 16, 2019.

The upside risks they identify are:

1) External inflationary pressures.

2) Cost pressures or spending reallocations.

3) Currency depreciation.

4) Persistence in core inflation.

The minimum of the exchange rate during the session of 19.9135 occurred in the hours after the monetary policy announcement.

Grupo Financiero Base maintains the expectation that Banco de México will keep the interest rate unchanged for the rest of the year at 4.00 percent.

Other currencies

In the broad basket of main crosses, the Peruvian sol was the most appreciated currency (+ 1.60%), followed by the Mexican peso (+ 1.09%) and the Russian ruble (+0.82 percent).

It is important to mention that the appreciation of the Peruvian sol was parallel to the Mexican peso, showing an important advance in the opening at 9:00 am.

The Peruvian sol, unlike the Mexican peso, does not operate 24 hours a day. In the session, the dollar weighted index closed down 0.17 percent.

However, it was far from erasing Wednesday’s gains, when it rose about 0.70 percent.

The performance of the currencies of Latin American economies during Friday’s session is probably influenced by the monetary policy announcement of Banco de México and the monetary policy announcements in Chile and Peru at 5:00 p.m. and 6:00 p.m. today, respectively. .

In the session, the euro touched a minimum of 1.2052 and a maximum of 1.2106 dollars per euro.

For its part, the euro peso touched a minimum of 24.0536 and a maximum of 24.3923 pesos per euro.

At the close, interbank quotes for sale stood at 19.9470 pesos per dollar, 1.4054 dollars per pound and 1.2085 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE