The peso closed the session with an appreciation of 0.38% or 7.6 cents, trading around 19.90 pesos per dollar, with the exchange rate touching a minimum of 19.8579 and a maximum of 19.9951 pesos.
The peso’s appreciation deepened as the dollar weakened in the morning, causing the weighted index to close 0.10 percent lower.
Meanwise, the weakness of the US dollar was due to a strengthening of the Canadian dollar of 0.89%, closing at 1.2497 Canadian dollars per dollar, placing it as the most appreciated currency in the wide basket of main crosses and being the highest daily appreciation of the currency since 1 June 2020.
At the same time, the appreciation of the Canadian dollar during the session occurred after the Bank of Canada announced in its monetary policy announcement that it will cut its weekly bond buying program from C $ 4 billion to C $ 3 billion. dollars as of April 26, further indicating that interest rates could rise as early as 2022.
The event is relevant because it is the first advanced economy to start a monetary policy normalization process.
While there are still months to go before interest rates start to rise, the market could again speculate on the likelihood that other central banks will start to abandon their broadly flexible monetary stance in the coming months.
It is worth mentioning that inflation in Canada has also shown an increase at the beginning of the year, going from 0.7% annually in December to 2.2% in March, a level not seen since February 2020.
It is important to mention that the exchange rate has remained relatively stable due to the scarcity of relevant economic information, pending the inflation data in Mexico that will be published tomorrow at 6:00 a.m. and the economic growth data for the United States and Mexico corresponding to the first quarter, which will be published on April 29 and 30 respectively.
Another relevant event is the Federal Reserve’s monetary policy announcement scheduled for Wednesday, April 28, which is why, until that date, the exchange rate is likely to show a poorly defined trend.
Regarding the inflation data in Mexico that is published tomorrow for the first half of April, it is expected to show an increase to reach an annual rate between 5.7 and 6%, as a consequence of a mathematical effect with a low base of comparison and due to pressures in the prices of goods and energy.
If confirmed, it would be the highest annual inflation since the second half of December 2017.
In the first half of March, annual inflation was at 4.12% and in the second half at 5.22%. It should be remembered that Banco de México’s inflation target is 3%, with a variation interval of +/- 1 percent.
In the session, the euro touched a low of 1.1999 and a high of 1.2044 dollars per euro. Finally, the euro peso touched a minimum of 23.8438 and a maximum of 24.0570 pesos per euro.
At the close, interbank prices for sale stood at 19.8961 pesos per dollar, 1.3925 dollars per pound and 1.2034 dollars per euro.
Gabriela Siller; PhD
Director of Economic-Financial Analysis.