MEXICO CITY.- The Mexican peso ended this Friday with its highest weekly appreciation against the dollar in international markets, concluding around 23.31 units according to Bloomberg data, 1.71 pesos less or 6.81% lower than the end of the week previous.
That is the most important percentage drop for that period since the first week of April 1995.
Until last Wednesday, the retail dollar sold for 24.42 pesos at the windows of the banks, which meant a profit of 94 cents or 3.7% compared to the closing on Friday, April 3.
However, if the levels at which the week ended in international markets were maintained, it is probable that on Monday the retail dollar could open next week below 24 pesos.
The weakening of the dollar in the week was the result of several factors, among which are the agreements reached between members of the Organization of Petroleum Exporting Countries (OPEC), Russia and other producing nations to reduce their crude supply by 23% in the face of the crisis in the sector caused by the Covid-19 pandemic.
The agreement, which won Mexican support this Friday, consists of the withdrawal of 10 million barrels per day of crude oil from the market, although Mexico will only withdraw 100,000 barrels per day.
Until last Thursday, before the negotiations concluded, the price of WTI and Mexican crude reported a loss of 19.7% and 19.2% respectively compared to the closing of the previous Friday, however, it is expected that next Monday they will register a significant recovery due to agreements.
Another element that contributed to reducing the perception of risk among investors were the support programs that the US government is announcing for the economic reactivation.
The United States Federal Reserve announced last Thursday a comprehensive $ 2.3 trillion program to aid local governments and small and medium-sized businesses in its latest effort to keep the economy afloat as the country faces the coronavirus pandemic. .
Likewise, at the beginning of the week, a decrease in the rate of new coronavirus infections was observed in the United States and Europe, which triggered opportunity purchases in capital markets globally and a partial correction of the losses of previous weeks.
Although the Mexican peso reported a significant recovery in the week against the dollar, it is expected that volatility will continue to be observed, as the coronavirus crisis has not yet concluded and in the following sessions it is likely that the number of deaths will continue to grow. fully infected.
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