The peso loses in exchange rate against the dollar: 20.31

The peso closed the session with a depreciation of 0.41% or 8.3 cents, trading around 20.31 pesos per dollar, with the exchange rate touching a minimum of 20.1456 and a maximum of 20.4737 pesos per dollar, being the fourth consecutive session that the peso losing ground against the dollar and accumulating a loss of 1.78% in that period.

México and the peso

The peso was the most depreciated currency in the broad basket of main crosses.

The depreciation was due to two factors:

First factor

The perception of risk with respect to Mexico has risen.

The low temperatures in the state of Texas have severely affected the production and distribution of energy in the region, including natural gas exports to Mexico.

Restrictions on gas exports outside of Texas and higher prices have led to the temporary suspension of activities in companies in the manufacturing sector, which will have an observable impact on economic activity in February.

Additional suspensions of electricity in Mexico and the possibility of suspensions in the distribution of natural gas are not ruled out.

The foregoing led to the peso becoming the most depreciated currency.

Second factor

Demand for risk assets and currencies from emerging economies fell.

The most recent signs of an accelerated economic recovery in the United States and the expectation of new fiscal stimuli have led to increases in interest rates in the secondary market, as it is speculated that the Federal Reserve could abandon its accommodative stance early.

The yield rate on the 10-year Treasury bonds showed an increase of 2.5 basis points, reaching 1.29%. On the other hand, losses were observed in the capital market.

In the United States, the S&P 500 closed 0.44% down, while the Nasdaq fell 0.72%. Other currencies that lost on par with the Mexican peso were the Chinese yuan with 0.38%, the Brazilian real with 0.36% and the Russian ruble with 0.25 percent.

New level and the peso

From a technical point of view, the exchange rate is once again testing the resistance of the 100-day moving average, which is close to 20.3435 pesos per dollar.

This level has not been consistently exceeded since June 2020 and has been a resistance on several occasions since then.

If it remains above this moving average for several sessions, it would be a sign of an upward trend change, probably towards the area close to 21.00 pesos per dollar.

In the session, the euro touched a low of 1.2036 and a high of 1.2095 dollars per euro. Finally, the euro peso touched a minimum of 24.3092 and a maximum of 24.7152 pesos per euro.

At the close, the interbank prices for sale stood at 20,3060 pesos per dollar, 1.3975 dollars per pound and 1.2093 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE