Mexico City. While awaiting the outcome of the debate on judicial reform in the Chamber of Deputies and amid fears about the economy, the Mexican peso is accelerating its fall against the dollar towards levels of 20 units per dollar.
At the opening of the American markets, the Mexican currency depreciated by 0.78 percent, trading at around 19.9535 pesos per dollar.
Investors will be watching this Tuesday as discussions begin in the Chamber of Deputies on the reform of the judiciary. However, Inegi confirmed this morning that aggregate demand, private consumption and fixed investment slowed down in the first half of 2024, as gross fixed capital formation fell one percent monthly in June, and advanced only 0.7 percent annually, while private consumption increased only 0.1 percent monthly, 2.5 percent annually. On the other hand, the unemployment rate rose to 2.9 percent in July.
Thus, the exchange rate in Mexico could break the psychological level of 20 pesos per dollar this session, which is estimated to remain volatile for the Mexican currency.
The dollar index, which measures the performance of the US currency against a basket of six international currencies, fell 0.01 percent to 101.614 units.
Following yesterday’s low volume due to the holiday in the United States, the Price and Quotation Index of the Mexican Stock Exchange (IPC) fell this morning by 1.60 percent, to 51,643 points. The drop in the price of shares of Grupo Carso (3.71 percent); Bimbo (3.70 percent); Gruma (2.85 percent) and Alsea (2.65 percent) kept the main Mexican stock index under pressure.
Oil on the decline
Meanwhile, Wall Street is back in business today, although the agenda for the week postpones the most tense moments to the coming days, especially Friday, when the official US employment report for August will be released.
The US employment figures could be key for the Federal Reserve (Fed). According to analysts, the central scenario for the Fed meeting on 18 September remains a cut of 0.25 percentage points. Analysts do not rule out, however, that the employment data, depending on its degree of strength, could significantly strengthen or reduce the chances of a half-percentage point interest rate cut.
The Nasdaq fell 1.65 percent, while the S&P 500 and the Dow Jones lost 1.20 and 1.05 percent, respectively.
Crude oil prices are once again approaching their annual lows. Brent crude oil is down more than 4 percent to $74.25 a barrel. Demand prospects from China remain subdued ahead of the expected increase in production by OPEC+. Meanwhile, WTI is down 3.77 percent to $70.78 a barrel.
As in the currency market, the lull in the fixed-income market has persisted since yesterday. Interest on debt has barely changed as it awaits further macroeconomic news. The required yield on 10-year US bonds remains at around 3.90 percent.
#Peso #falls #dollar #pessimism #markets
– 2024-09-09 10:13:57
