The Mexican peso appreciated slightly on Wednesday pending the Federal Reserve's monetary policy decision later in the day, where a new interest rate hike of three-quarters of a percentage point is anticipated. The stability of the peso compared to other currencies is due to the anticipation that the Bank of Mexico has shown to maintain the interest rate differential, through a restrictive monetary policy.
dollar to peso exchange rate
The Mexican peso was trading at 19.9804 per dollar, with a gain of 0.02% compared to Tuesday's closing price, registered by the Bank of Mexico, of 19.9848 pesos per dollar.
"Despite the calm that has been shown, we expect a volatile session," said Monex Grupo Financiero. "There is high uncertainty about the direction of the break, but we think the odds are tilted towards a 'hawkish' stance from the Fed, which would put upward pressure."
Participants were also digesting Russian President Vladimir Putin's decision to m
"The stability of the peso compared to most currencies is mainly due to the fact that the Bank of Mexico has adopted a restrictive monetary stance in advance of the Federal Reserve and the market anticipates that, even if the Fed surprises with an increase in 100 base points, Banco de México would do the same, to maintain the interest rate differential," Banco Base said.
With information from Reuters and Bloomberg.
