EconomyMexican peso outlines week of losses amid dollar strength

Mexican peso outlines week of losses amid dollar strength

The Mexican peso fell in the first operations on Friday, pressured by the global advance of the dollar and the uncertainty in the macroeconomic plane that is impacting the currencies of the region.

This morning, the Mexican peso is trading at 20.1741 per dollar, according to data from Bloomberg.

This implies a loss of 0.23% against the closing price of the Bank of Mexico. And, according to Reuters estimates, it accumulates a decline of 1.73% in the week.

This is the fourth consecutive day in red for the Mexican currency, at a time when investors continue to assess the magnitude of future interest rate hikes in the United States and local data that anticipate an economic slowdown in Mexico .

"The dollar is strengthening, causing all developed and most emerging currencies to trade in negative territory," Banorte said in a note sent to clients.

The national statistics institute of Mexico, INEGI, published on Friday the retail sales report for June, which denotes a decrease in consumption, with a drop of 0.3% in the month-on-month comparison, although the reading marked a year-on-year advance of 1.5%.

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Although the Mexican currency suffered a slight depreciation at the opening of this Friday, it continues at levels that could consolidate in a downward trend, but a rebound is not ruled out.

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The exchange rate recorded its fourth day of appreciation and closed at 19.8873 pesos per dollar, its best level since September 12.

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While signs on monetary policy are expected in the United States, Canada, Brazil and Europe, the Mexican peso advances slightly this Tuesday.

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Among the strongest falls in the national currency are those caused by the covid-19 pandemic, in 2020, and the one that triggered the Trump phenomenon during the government of Enrique Peña Nieto.

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Analysts in Mexico estimate that the peso could find a ceiling at levels of 20.30 units, since there are no serious elements that allow a strong depreciation of the local currency to be perceived.