Peso recovers; closes at 19.07 per dollar

Mexico City. The peso appreciated 1.81 percent compared to Thursday’s close, as the exchange rate stood at 19.0708 units of the local currency per dollar at the end of the last day of the week, according to data from the Bank of Mexico (BdeM).

Analysts at Grupo Monex commented that this behavior is explained by the announcement by the president of the Federal Reserve (Fed) to begin the cycle of interest rate cuts in September; the weakening of the dollar, boosting emerging market currencies; and greater confidence in the Mexican economy, due to the narrative of the BdeM and the Fed.

The Mexican currency’s losses were cut after it widened its weakness on Thursday due to inflation data and statements by the United States ambassador to Mexico, Ken Salazar, on the possible approval of judicial reform.

The spot dollar, which is used for wholesale operations, stood at 19.0709 pesos, a level that meant an appreciation of 1.81 cents compared to the closing of 19.4235 in the previous session, according to data from the BdeM.

However, the Mexican currency showed losses of 2.40 percent or 0.44 cents compared to the closing price on Friday, August 16, when the exchange rate stood at 18.6228 pesos for each US currency.

So far this year, the local currency has depreciated 12.71 percent or 2.15 pesos, compared to December 29, 2023, when it was quoted at 16.9109 pesos per dollar.

Monex commented that the Mexican peso, as well as the rest of the emerging currencies, showed greater attractiveness compared to dollar-denominated assets, driving the downward trend of the exchange rate.

However, analysts noted that outside the economic environment, market concerns over the issue of judicial reform in Mexico have led to episodes of volatility in the exchange rate.

The Mexican Stock Exchange (BMV) opened at 53,447.55 points, representing a loss of 417.18 points or 0.77 percent compared to Thursday’s close.

However, at midday the S&P BMV IPC index stood at 53,658.83 points, which represented an advance of 211.28 points compared to the beginning of Friday or an advance of 0.39 percent.