Mexico City. Amid heightened risk aversion in Mexico and economic data in the United States, the Mexican peso was the most depreciated currency in the broad basket of major crosses, registering a daily loss of 1.83 percent, equivalent to 34.74 dollars, to close at 19.3433 units per spot dollar.
According to data from the Bank of Mexico, the exchange rate on Wednesday ranged between a maximum of 19.4150 units and a minimum of 19.1700 units in the wholesale market.
The depreciation of the peso was due to several factors, mainly due to greater uncertainty about representation in Congress and the discussion of the draft opinion on reform of the Judiciary next Monday and its probable approval in September.
In addition, 818,000 jobs were revised downward between April 2023 and March 2024 in the United States. The revision, according to data from Franklin Templeton, is the most significant revision since 1991, when 902,000 jobs were revised downward, and it was during a recession.
This fueled fears of a recession in the United States, Mexico’s main trading partner, at the start of the day.
The dollar’s weakness continued, reaching its lowest level of the year against the euro. The common currency exceeded 1.11 dollars and the pound was quoted at 1.30 units. According to the weighted index, DXY, which measures the performance of the US currency against a basket of six international currencies, it depreciated 0.25 percent, to 101.042 units.
Following the publication of the Federal Reserve’s (Fed) monetary policy minutes and awaiting the meeting of central bankers in Jackson Hole that begins this Thursday, and in the midst of the uncertainty that has been installed in Mexico regarding the internal policy to be followed in the short term, the exchange rate in the country has entered a period of high volatility.
The minutes of the last meeting of the Federal Reserve (Fed) were published today, in which the members of the central bank consider it prudent to reduce the reference rate in September, since the macroeconomic data are giving a certain indication for it.
The big event of the week will take place on Friday with a speech by Federal Reserve Chairman Jerome Powell. Investors will be closely watching for any clues he may give about the meeting on September 18, when the Fed is expected to lower interest rates by 0.25 percentage points.
And if the Federal Reserve is expected to lower rates, the Mexican peso should respond with an appreciation, but there are several factors that keep it under pressure.
Amid recommendations from some investment banks to reduce their positions in Mexican assets, given the uncertainty of a new judicial and congressional panorama, the Mexican Stock Exchange (BMV) fell 0.18 percent, to 53,864.73 points.
Wall Street closed with gains; the Dow Jones gained 0.14 percent to 40,890.49 points; the S&P 500 advanced 0.42 percent to 5,620.85 points and the Nasdaq advanced 0.57 percent to 17,918.99 points, after yesterday’s moderate falls, after the minutes of the last Federal Reserve meeting (on July 30 and 31, when rates remained unchanged) indicated a “probable” cut in September, as expected by the markets.
Brent crude futures fell 1.49 percent to $76.05 a barrel, while U.S. West Texas Intermediate (WTI) crude futures fell 1.69 percent to $71.93 a barrel.
U.S. employers added far fewer jobs than initially reported in the 12 months through March, the Labor Department reported Wednesday.
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– 2024-08-29 14:03:27
