The peso begins this Tuesday with a marginal appreciation against the US currency before the start of the Fed’s monetary policy and the discount on the increase of 75 basis points, so the money market will have a day of caution and until tomorrow , after the announcement, greater movements are expected for portfolio adjustments.
According to data from Bloomberg and Bank of Mexico (Banxico), the Mexican currency began the day on Tuesday with a marginal appreciation of 0.06%, remaining at 20.4349 units, if this trend continues, it would point to its third positive day. The operating range is between 20.4108 and 20.5389 units.
“The peso remains above 20.45 units per dollar, if it reaches this level, the doors will open to a critical level of resistance at 20.70 units, this scenario would remain in force in view of the fact that this week the FOMC is expected to raise its rate, which would momentarily strengthen the US currency”, OctaFX analysts said.
On the contrary, among the most depreciated currencies in the course of the morning are the Russian ruble with 2.07%; the Hungarian forint with 1.22%; the Polish zloty with 1.18%; the Swedish krona with 0.85% and the pound sterling with 0.50%.
The dollar index breaks negative streak
The dollar index (DXY) breaks, for the moment, its three-day losing streak, due to greater risk aversion in anticipation of the publication of US economic growth for the second quarter. If a second quarterly fall is confirmed, speculation about a recession in the United States increases.
Banco Base analysts mentioned that although two quarterly drops in GDP are not the formal criteria to define a recession, it is enough to significantly increase risk aversion.
The DXY stands at 106,877 points, which means an increase of 0.67% compared to Monday’s close.
Fears of gas shortages affect the euro
The prospect of a further cut in Russian gas supply sent the euro lower on Tuesday, at a time when dollar gains were tempered by growing uncertainty over the US Fed’s monetary policy tightening path. after this week’s expected rise in interest rates.
The euro was down 0.7% at $1.0142 as the currency remains above parity against the dollar, reached earlier this month. However, ING Bank strategist Francesco Pesole warned that traders could start to price in expectations of a rate hike from the European Central Bank.
With information from Reuters