EconomyThe weight of the strongest currencies vs. the dollar;...

The weight of the strongest currencies vs. the dollar; add another weekly appreciation

The Mexican currency registered its second week of appreciation with 0.48%, remaining at a level of 20 pesos, according to data from the Bank of Mexico (Banxico). The peso maintained its strength despite the fact that the dollar had gained ground in recent days due to the pressure of a more aggressive monetary policy by the Federal Reserve.

At the close of Friday, the Mexican currency closed at a level of 20.0302 pesos per dollar, an intraday appreciation of 0.49% and 0.48% during the weekly cut. In the year, it registers a strengthening of 2.33% and ranks as one of the most resilient currencies to the dollar in 2022.

This is explained despite the fact that the dollar index (DXY) rose again, resuming the upward trend that had slowed down in recent sessions. Janneth Quiroz, deputy director of economic analysis at Monex, said that the behavior of the peso has to do with different factors such as the good employment report in the United States for September and the unemployment rate, which unexpectedly fell from 3.7% to 3.5. %.

“With this (with the employment data), the United States economy continues to show good behavior and the Mexican economy, being strongly related to the United States, would imply that we continue to see our exports continue to increase at a good pace, which leaves an important spill of dollars”, added Quiroz.

He mentioned that the underlying inflation data for September in Mexico, which has already recorded 22 consecutive months on the rise, will allow the Bank of Mexico to continue increasing interest rates at the same rate as the Federal Reserve, which would maintain the attractiveness of our currency.

The Mexican peso ranked as the sixth most appreciated emerging currency during the week from September 30 to October 7. Other currencies that stand out were the Brazilian real, with 4%; the Chilean peso, with 3.22%; the South Korean won, with 1.3%; the Thai bath, with 0.89%, and the Peruvian sol, with 0.66%.

So far this year, the currencies that are more resilient to the US currency are the Russian ruble, with 20.9%; the Brazilian real, with 7.12%, and the Mexican peso, with 2.46%.

The rebound in oil due to OPEC’s decision to cut oil production by 2 million barrels per day could benefit Mexico as it is an exporter of this resource, market sentiment will assume that the country obtains higher income given the possibility that prices continue to rise.

How are currencies developed?

Developed currencies mostly depreciated due to the uncertainty generated by the future of monetary policy in the world, specifically in the United States, because after the employment data, operators discount that the Fed will continue with its more restrictive monetary policy than expected. Was expected.

The currencies of developed countries that presented significant depreciations compared to Friday, September 30, were the Swedish krona, with 1.07%; the pound sterling, with 0.75%; the Swiss franc, with 0.74%; the Danish krone, with 0.62%; the euro, with 0.59%; the Australian dollar, with 0.39%, and the Japanese yen, with 0.35%.

“Speculation about the magnitude of the rate hike for the November Federal Reserve meeting will also depend on the US inflation data, which will be released next week,” CI Bank analysts said.

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