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 Rises Against Weakening Dollar: An Expert Weighs in
**World Today News**: The Mexican Peso bounced back today, gaining 1.04 percent against a globally weakening US dollar. This follows three consecutive days of decline. Joining us to discuss the factors driving these fluctuations is Dr. Elena Ramirez, Professor of International Economics at the National Autonomous University of Mexico. Welcome, Dr. Ramirez.
**Dr. Ramirez**: Thank you for having me.
**World Today News**: Could you shed some light on the primary reasons behind the Peso’s strengthening today?
**Dr. Ramirez**: Several factors are at play. Firstly, the global dollar weakened, as evidenced by the DXY index dropping 0.62 percent. This makes the Peso relatively more attractive to international investors. Secondly, the appointment of Scott Bessent as U.S. Treasury Secretary, though seen as a market stabilizing move, has created certain uncertainties about future U.S. economic policy. This uncertainty motivated some investors to temporarily shift towards safer assets, including the Peso. Lastly, rumors about a potential ceasefire agreement between Israel and Hezbollah in Lebanon contributed to a more positive global sentiment, encouraging investment in emerging markets like Mexico.
**World Today News**: How notable is the impact of the appointment of Scott Bessent on the Mexican financial market?
**Dr. Ramirez**: It’s too early to definitively assess the long-term impact. though, initial market reactions suggest a cautious optimism. Bessent is known for his pragmatism and experience, which could lead to stable economic policies. However,
the looming possibility of protectionist measures from the Trump administration still casts a shadow of uncertainty.
**World Today News**: You mentioned Mexican debt interest rates. How are they affected by these events?
**Dr. Ramirez**: Generally speaking, when investors perceive a currency as strengthening, they rush to acquire debt instruments denominated in that currency, leading to lower interest rates. This is precisely what we’re observing in Mexico, with debt interest rates declining in response to Peso appreciation and the improving global sentiment.
**World Today News**: What does this indicate for the Mexican economy in the short to medium term?
**Dr. Ramirez**:
These developments are broadly positive for Mexico in the short term, suggesting a possible
strengthening of the economy.A stronger Peso makes imports cheaper, making it easier for
businesses to access goods and lowering the cost of living for consumers.However, we must
remain vigilant about the long-term consequences of potential U.S. protectionism on Mexico’s export-driven economy.
**World Today News**: Thank you, Dr. Ramirez, for providing your expert insights. We appreciate your time.
**Dr. Ramirez**: My pleasure.
