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The peso pierces support at 19.70 against the dollar

The peso closed the session with an appreciation of 1.11% or 22 cents, trading around 19.67 pesos per dollar, touching a low of 19.6010 pesos after piercing the key support of 19.70 pesos.

It should be noted that the low of the exchange rate had not been seen since March 5, during the first weeks of volatility in the exchange market associated with the Covid-19 pandemic.

In the foreign exchange market, most currencies gained ground against the dollar, while the dollar weighted index lost 0.16%, hitting a new low since February 2018.

The weakness of the dollar is the result of a greater appetite for risk, in view of the expectation that the Joe Biden administration will have a more aggressive fiscal policy.

It should be noted that, at the close of the session, it was confirmed in the United States that the Democratic Party managed to obtain the two Senate seats that were voted yesterday in the state of Georgia, giving 50% of the seats to the Democrats.

With this, the party obtains effective control of the Upper House, since the tiebreaker vote remains in the hands of who will be the new president of the Senate and vice president of the United States, Kamala Harris.

The peso

In the foreign exchange market, the most appreciated currencies were the Mexican peso, followed by the Turkish lira with 1.10%, the Israeli shekel with 0.71%, the Norwegian krone with 0.30% and the Colombian peso with 0.61 percent.

A factor that contributed to the strengthening of the peso was the advance of oil prices during the session, with the WTI rising 1.10% and trading around $ 50.48 per barrel.

This was due in part to the fact that in the United States a drop in oil inventories of 8.01 million barrels was confirmed during the previous week, accumulating two weeks with inventory declines for a total of 14.07 million barrels.

It is important to note that the riots in the United States Capitol had no observable effect on the exchange rate, despite the increased risk.

In the session, the exchange rate touched a minimum of 19.6010 and a maximum of 19.9920 pesos per dollar, the euro touched a minimum of 1.2266 and a maximum of 1.2349 dollars per euro.

Finally, the euro peso touched a minimum of 24.1075 and a maximum of 24.5489 pesos per euro.

At the close, the interbank quotes for sale were 19.6582 pesos per dollar, 1.3614 dollars per pound and 1.2326 dollars per euro.

 

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE

 

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