The Mexican peso appreciated for the fourth consecutive session on Thursday on a global weakening of the dollar as investors await the Bank of Mexico’s monetary policy announcement later in the day.
Exchange rate from dollar to pesos
The dollar was sold at 19.9317 at the open this morning, according to data from Bloomberg. This implies an appreciation of the Mexican peso against the dollar of about 0.50%, taking into account that the closing price of the Bank of Mexico, on Wednesday, was 20.0331 pesos per dollar.
“After knowing the industrial production data for June in Mexico, the market remains attentive to Banxico’s decision,” said Luis Adrián Muñiz, economist at VectorAnálisis. “It is unanimously expected that the central bank (Banco de México) will increase the reference rate by 75 bp. Pay attention to the tone of the statement.”
The weakening of the dollar deepened after lower-than-expected inflation was announced in July in the United States, which gives the FED room not to aggressively raise interest rates in its next monetary policy decision.
“While yesterday’s data clearly reduces the risk of further aggressive action from the Fed (+75 basis points) and thus reduces demand for US dollars, we also see it as unlikely that this data alone will trigger much more US dollar sales from now on,” currency analysts at MUFG said in a note.
The statistics institute reported earlier that the industrial activity of the second largest economy in Latin America rose 0.1% in June against the previous month and grew 3.8% year-on-year.
For the rest of the day, the peso is expected to oscillate in a range of 19.82 to 20.06 units, according to the local firm Banco Base.
With information from Reuters.