Peso closes the week with gains, boosted by US employment report

The Mexican peso appreciated and recorded one of the best performances of the day among global markets, after the release of a solid employment report in the United States.

In wholesale operations, the peso closed at 19.2587, with a gain of 10 cents (0.55 percent) compared to the previous day, according to the price of the Bank of Mexico. During the week, it achieved a profit of 43 cents (2.19 percent), despite a strengthening of the dollar.

While the US employment data, on the one hand, reduced bets that the Federal Reserve (Fed) will maintain large rate cuts at its two remaining meetings this year, on the other, it sent good signals about the health of the largest economy in the world and Mexico’s main business partner, analysts agreed.

“The weight is benefited by several factors. On the local front, the unemployment rate continued to decline, reflecting reduced pressures on the labor market. On the external side, the employment data in the United States undermines the vision of an economic slowdown that could permeate our country, in addition to marking a more moderate pace of cuts for the Fed, in line with the expectations of Bank of Mexico,” he said. Monex.

Exchange specialists consulted by Reuters also attributed part of the appreciation of the peso to the decision the day before by the Supreme Court of Justice of the Nation to admit a procedure to analyze the constitutionality of a controversial reform to the Judicial Branch recently enacted and that has had an impact on the Mexican markets.

For its part, the dollar scored its highest level in seven weeks, the dollar index reached 102.69 points, its highest level since August 16, and concluded its best weekly percentage increase since September 2022, after a surprisingly solid jobs report led traders to trim bets that the Federal Reserve will cut interest rates again by half a percentage point at its next policy meeting.

The US currency was also boosted this week by safe haven demand amid concerns about the escalation of the conflict in the Middle East.

The benchmark index of the Mexican Stock Exchange (BMV) rose 1.81 percent to 52,609.87 points. However, it ended the week with a slight cumulative decline of 0.3 percent.

Wall Street closes higher and the Dow Jones sets a record

Stock prices on the New York Stock Exchange rose on Friday after a surprisingly strong report on the U.S. labor market increased optimism about the economy.

The Dow Jones advanced 0.8 percent, registering a record of 42,352.75 points. The S&P 500 index rose 0.9 percent to 5,751.07 units, approaching its all-time high reached on Monday. For its part, the Nasdaq composite gained 1.2 percent to 18,137.85 units.

Those leading the increases were banks, airlines, cruise operators and other companies whose profits may benefit the most from a stronger economy, in which people have jobs and a greater ability to pay for things.

Cruise operator Norwegian Cruise Line rose 4.9 percent, JPMorgan Chase 3.5 percent and small companies in the Russell 2000 index gained 1.5 percent.