Peso breaks three-week losing streak

The peso posted a week of solid gains, supported by a weakening dollar amid growing expectations of an imminent rate cut by the Federal Reserve (Fed), which offset local concerns about the approval of a controversial judicial reform.

In wholesale operations, the exchange rate closed at 19.21 units per dollar, a recovery of 25 cents (1.32 percent) compared to the previous day, according to the closing price of the Bank of Mexico. With this, the peso broke a three-week losing streak, a period in which it fell to levels of two years ago.

On Tuesday night, the peso weakened to 20.1470 per dollar as Congress prepared to approve the reform of the Judicial Branch. However, it has regained ground and added 78 cents (3.92 percent) in the week, its best performance since June 2021.

The Mexican currency was favored by the weakening of the dollar in light of the possibility that the Fed will carry out a 0.5 percentage point cut in its reference interest rate next week.commented Janet Quiroz Zamora, director of analysis at Grupo Financiero Monex.

For its part, the benchmark index of the Mexican Stock Exchange, the S&P/BMV IPC, rose 0.03 percent and closed at 52,016.85 points, after a session and a week of volatility.

Last Wednesday, it traded below 51 thousand units, meaning it fell to levels not seen since 2021. However, at the end of the week, it managed to reverse the trend and accumulated a yield of 1.8 percent.

The BMV followed the performance of Wall Street, where the main indexes closed higher on Friday, as investors focused on the possibility of a large interest rate cut by the Federal Reserve next week.

Bets on the size of the cut have been volatile and were even late on Friday. Expectations for a half-percentage point cut rose to 49 percent from 28 percent on Thursday, according to the CME FedWatch tool, compared with a 51 percent chance of a quarter-percentage point cut. The U.S. central bank is due to announce its policy decision on Sept. 18.

Oil prices fall after storm

Oil prices fell as US production in the Gulf of Mexico resumed following disruptions caused by Hurricane Francine.

Brent crude fell 36 cents to $71.61 a barrel and U.S. WTI crude lost 32 cents to $68.65. Mexican export mix fell 21 cents to $63.74 a barrel.

However, hydrocarbon prices broke a weekly downward streak and ended with slight gains.