The peso loses 4.4% against the dollar in the last 4 sessions

The peso closed the session with a depreciation of 0.97% or 20.7 cents, trading around 21.52 pesos per dollar, with the exchange rate touching a minimum of 21.2141 and a maximum of 21.6357 pesos.

The peso accumulates a depreciation of 4.44% in the last four sessions.

During the session, the Mexican peso was the fourth most depreciated currency in the exchange market, behind the Turkish lira which lost 2.94%, the Brazilian real with 2.32% and the South African rand with 1.16 percent.

The depreciation of the peso was mainly the result of a strengthening of the US dollar, which advanced 0.55% according to the dollar weighted index and accumulated an increase of 1.90% in the last four sessions.

It should be noted that the upward trend of the dollar began on February 25 and the index has reached levels not seen since November 18, that is, almost four months ago.

The strength of the dollar continues to be a reaction to the upward pressure on interest rates in the bond market, as the 10-year Treasury bond rate showed an increase of 3.7 basis points, standing at 1.60%, close to the maximum levels in the year.

From a technical point of view, the exchange rate is likely to continue its upward trend, after piercing the resistance of 21.50 pesos per dollar and approaching the resistance marked by the psychological level of 22.00 pesos per dollar, which would be the low range of the pessimistic scenario for the exchange rate.

The peso

If a downward movement of the exchange rate is observed in the short term, it is likely that this is a correction and should not be considered as a change in trend.

In other financial markets a mixed behavior was observed.

Meanwhile, in the capital market, the main indices in Europe closed with gains, standing out Germany, where the DAX advanced 3.31 percent.

In contrast, in the United States the Nasdaq lost 2.41%, while the markets continue to erase previous gains of companies in the technology sector, which had a positive performance during the pandemic.

In the commodities market, losses were observed, mainly as a result of the strengthening of the US dollar, which reduces the demand for commodities that are priced in dollars.

The WTI closed down 2.04%, trading at 64.74 dollars per barrel, while the Brent lost 1.98% and settled at 67.99 dollars per barrel.

Among metals, gold lost 1.15%, silver fell 0.55% and industrial metals such as nickel and steel lost 0.52 and 0.05% respectively.

In the session, the euro touched a low of 1.1845 and a high of 1.1932 dollars per euro. Finally, the euro peso touched a minimum of 25.3075 and a maximum of 25.6739 pesos per euro.

At the close, the interbank quotes for sale stood at 21.5170 pesos per dollar, 1.3816 dollars per pound and 1.1845 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE