Mexico City. The Mexican peso returned to gains this Monday against a dollar that weakened globally. After three consecutive downward closings, the Mexican currency appreciated 1.04 percent, equivalent to 21.31 cents against the US currency, to 20.2788 pesos per spot dollar.
The Mexican currency received with stability the appointment of Scott Bessent as Secretary of the United States Treasury under the new administration of Donald Trump.
According to data from the Bank of Mexico (BdeM), the exchange rate operated between a maximum of 20.4200 units and a minimum of 20.1900 units. Rumors that the ongoing conflict between Israel and Hezbollah in Lebanon could have a ceasefire agreement on the table have encouraged investors.
While the dollar deflated, as its DXY index, which measures the behavior of the US currency against a basket of six international currencies, fell 0.62 percent, to 106,842 units. And the repercussions of the appointment of the new US Secretary of State have a full impact on the fixed income and currency markets.
Debt interest rates drop significantly in anticipation of greater fiscal and debt containment thanks to the more orthodox profile of Scott Bessent (George Soros’ extrader and fund manager). Investors regain confidence in the US debt, so the purchases reduce the interest rate on the 10-year bond to around 4.227 percent, after last week it reached levels close to 4.44 percent.
The Dow Jones Industrial Average surged higher on Monday, starting the new trading week with a new all-time high just below the 44,800 zone, gaining 0.99 percent to 44,736.57 points. Meanwhile, the S&P 500 and the Nasdaq gained 0.30 and 0.27 percent, respectively.
The Mexican Stock Exchange (BMV), for its part, fell 0.44 percent, to 50,207.18 points. The main Mexican stock index fails to raise its head and remains at the lowest levels of a year ago.
Affected by the drop in the price of Televisa shares (4.88 percent); Peñoles (3.98 percent); La Comer (4.82 percent).
Texas intermediate oil (WTI) futures contracts, for delivery in January, the new reference month, closed this Monday with a drop of 3.2 percent, to $68.94 a barrel due to a possible truce between Israel and Hezbollah in Lebanon.
The US benchmark crude oil thus lost part of last week’s appreciation of 6.4 percent, attributed to the escalation of the war between Russia and Ukraine and its consequences on energy supplies in Europe.
For its part, the barrel of North Sea crude oil, the benchmark in Europe, Brent, for delivery in January, fell 2.87 percent this Monday in the London futures market, to $73.01 at the close due to the possibility of an “imminent” ceasefire agreement in Lebanon by Israel.
Oil prices reacted downward to the news that Israeli Prime Minister Benjamin Netanyahu has accepted “in principle” the United States proposal for a ceasefire in Lebanon, which would mean the total withdrawal of its troops in the neighboring country in 60 days.
For its part, gold lost 3.17 percent, to $2,650.50 per troy ounce, and moved away from its maximum levels. The same thing happened to bitcoin, which fell 4.52 percent, to 93,571.6 dollars.
#Peace #talks #encourage #financial #markets
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## Peso Rebounds as Dollar Weakens, Bessent Appointment Stirs Market
**World Today News Exclusive interview with Dr. Alejandro Perez, Senior Economist at the National Autonomous University of Mexico**
**World Today News:** The Mexican peso saw a important rebound today, appreciating 1.04% against the US dollar.What are the primary drivers behind this positive turn?
**Dr. Perez:** Several factors are at play here. First and foremost, the dollar itself weakened globally today, as reflected in the decline of the DXY index. This broader weakness naturally benefits other currencies, including the peso.
Secondly, the appointment of Scott Bessent as the new US Treasury Secretary seems to have been met with stability by the markets. Initial concerns about potential Trump administration policies impacting Mexico appear to be subsiding. investors are adopting a wait-and-see approach, but the immediate reaction is positive.
**World Today news:** The article mentions rumors of a possible ceasefire agreement in the Israel-Hezbollah conflict. Could this geopolitical growth be contributing to the pesoS strength?
**Dr.Perez:** Absolutely.Any sign of de-escalation in geopolitical hotspots usually boosts investor confidence.This translates to reduced risk aversion and a willingness to invest in emerging markets like Mexico.
**world Today News:** The article also highlights a drop in debt interest rates. Is there a direct link between the peso’s performance and these lower interest rates?
**Dr. perez:** There’s definitely a connection. When a currency strengthens, it generally lowers the cost of borrowing for that contry. This, in turn, tends to drive down interest rates. The strengthening peso signals a more favorable investment environment, contributing to the decline in debt interest rates.
**world Today news:** What can we expect for the Mexican peso in the coming weeks?
**Dr. Perez:** Predicting currency movements is always complex. however, based on current trends, the peso seems poised for relative stability in the short term. The dollar’s performance, developments in the US-mexico relationship, and global geopolitical events will all be key factors to watch.
**World Today News:** Thank you for your insights, Dr. Perez.
**Dr.Perez:** It’s my pleasure.
