The Mexican peso appreciated on Monday, continuing the upward trend from the end of the previous week, while investors continued to digest recent economic data and with their eyes on new messages from officials of the US Federal Reserve (Fed). At the opening of this Monday, the Mexican currency was one of the three most appreciated in the market.
dollar to peso exchange rate
The Mexican peso strengthened on the morning of this Monday, when the exchange rate was trading at 19.9505 pesos per dollar , a gain of 0.39% compared to the close of Friday registered by the Bank of Mexico, of 20.0302.
At the opening of the markets, the peso was the third most appreciated currency, according to Jannet Quiroz, chief economist at Grupo Monex.
Attention during the day will continue to be focused on the interventions of Fed officials, who “in recent days have reinforced their position in favor of continuing to increase the federal funds rate,” said Monex Grupo Financiero in an analysis note.
Federal Reserve Vice Chair Lael Brainard and Chicago Fed President Charles Evans will speak separately at the annual meeting of the National Association for Business Economics on Monday.
The president of the Federal Reserve Bank of New York, John Williams, said on Friday that it was necessary to “raise interest rates even more”, noting that the Fed still has work to do to reach its objective of reducing inflation and rebalance economic activity.
During the session, the exchange rate is expected to trade between 19.88 and 20.03 pesos per dollar, according to estimates by Banco Base.
What is weight stability due to?
According to an analysis by Banco Base, there are three reasons to explain the stability of the Mexican peso:
1) The peso finds support in the expectation that the Bank of Mexico will continue to raise its interest rate , at a rate at least equal to that of the Federal Reserve, keeping its relative monetary stance constant.
2) There is a strong demand for Mexican exports from the United States, to which are added the flows of remittances and FDI to Mexico.
3) There is a lower perception of relative risk for Mexico compared to other emerging and advanced economies , since the country is geographically far from the conflict in Ukraine and its main trading partner is the United States, unlike most of the relevant economies in America South, whose main trading partner is China.
With information from Reuters.
