The Mexican currency started Tuesday’s session with a marked depreciation of 1.11 percent, trading at around 20.1014 pesos per dollar.
The Mexican peso is the most depreciated currency, due to the increase in risk aversion regarding Mexico, as the probability of approval of the reform to the Judicial Branch has increased.
“The exchange rate is under pressure above 20 per spot dollar, in a session where attention will be on politics with the only Donald Trump-Kamala Harris debate tonight on the way to the White House, and the start of the discussion of judicial reform in Mexico in the Senate plenary session this Tuesday,” explained the analysis area of CIBanco.
The Mexican stock market also started with pessimism on Tuesday. The Price and Quotation Index fell 0.43 percent to 50,911.02 points.
The dollar index, DXY, which measures the performance of the US currency against a basket of six international currencies, appreciated 0.22 percent, to 101.737 units.
The European Central Bank (ECB) meeting on Thursday, with its expected interest rate cut, and US inflation data will be the next clues for investors. The US consumer price index (CPI) figures could also change expectations ahead of the Federal Reserve (Fed) meeting on 18 September.
The market remains divided between those in favour of a first cut by the Fed of 0.25 percentage points and those in favour of a more drastic reduction of 0.50 percentage points. The first option, 0.25 points, could fall short in the event of a deterioration in the economy, while the second option, a 0.50 point cut, could amplify fears among investors in a much more adverse macroeconomic context.
Meanwhile, Wall Street is trading mixed, with the Nasdaq up 0.38 percent and the Dow Jones down 0.47 percent.
On the eve of the ECB meeting and eight days before the Federal Reserve meeting, debt interest rates are consolidating their recent declines. The required yield on 10-year US bonds is around 3.70 percent.
The oil market remains on alert. The barrel of Brent remains at its lowest level for the year, even below 71 dollars. The weakness in demand from China overshadows the bullish attempts caused by the threat of a new storm on US production.
Unlike previous days, oil has barely changed as a result of the ‘currency effect’. Brent fell this morning by 2.19 percent, to 70.33 dollars per barrel; while WTI fell by 2.33 percent, to 67.11 dollars.
The truce in the agenda has stuck the price of gold near $2,534 per troy ounce, as it only advances 0.08 percent.
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– 2024-09-10 22:43:51
