The Mexican peso reached 20.14 units per dollar on Thursday, but managed to close with a marginal gain, thus breaking a four-day losing streak.
The last time the exchange rate was above 20 units per dollar was in October 2022, and it hovered in that range for most of the trading day on September 5.
“The peso surpassed the psychological level of 20 pesos per dollar, showing that the upward trend for the exchange rate is persistent and increases the probability that it will break the annual maximum of 20.2181 pesos per dollar. During September, the exchange rate could reach 20.50 pesos,” said Gabriela Siller, director of economic analysis at Banco Base.
What is the exchange rate today, September 5?
At the close of trading on Thursday, the Mexican peso appreciated 0.06 percent, bringing the exchange rate to 19.93 units, 1 cent less than the closing price reported by Banxico on September 4.
The ‘fall’ of the Mexican peso occurs in parallel with the vote on the reform of the Judicial Branch, which was approved in general and in particular by the deputies on Wednesday, September 4, and is expected to be voted on in the Senate in the coming days.
The majority that Morena and its allies have in Congress makes the chances of the judicial reform being approved greater, which has raised concerns in the private sector, as well as among business allies.
In August, the embassies of the United States and Canada expressed concern about the risks to democracy and the administration of justice that the reform of the judiciary could pose, and shared that investors from both countries also have concerns about the damage their investments could have.
Both President Andrés Manuel López Obrador and President-elect Claudia Sheinbaum said they should not worry about the reform of the judiciary, which, among other things, proposes the election of ministers, judges and magistrates through popular vote.
Claudia Sheinbaum said that the reform will eliminate the corruption that currently exists in the Judiciary, which will give more confidence to investors and countries with commercial relations; however, Ambassador Ken Salazar, workers of the Judiciary itself, as well as law students throughout the country have stated in recent days that they do not believe that the election of ministers guarantees a better administration of justice.
Jorge Gordiillo, director of economic and stock market analysis at CIBanco, explained that the exchange rate movements were not only related to the aversion to internal risk, as there were also events abroad that moved currencies, as the markets were concerned about the private sector employment report for the United States.
“I think that the internal issue (of judicial reform) is taking some respite. Concern is not completely ruled out and we still have to wait and see the discussion in the Senate, because the market still has some hope on this issue. There will still be episodes of volatility that will bring the currency at least close to 20.50 units,” he added.
How much does the dollar sell for in banks?
Information from Citibanamex indicates that the price of the dollar at bank counters is 20.44 pesos each.
The dollar index (dxy), which measures the strength of the US currency against a basket of six emerging market currencies, fell 0.28 percent to 101.07 points, while the Bloomberg dollar index (bbdxy) fell 0.19 percent to 1,230.71 units.
In the money market, the yield on the 10-year bond for the US market is 3.72 percent, in contrast, the yield on the 10-year Mbono in Mexico is at a rate of 9.98 percent.
The most appreciated currencies on Thursday were the Thai baht with 1.68 percent; the Brazilian real with 1.17 percent; the South African rand with 0.86 percent; the Philippine peso with 0.63 percent, and the Indonesian rupiah with 0.50 percent.
With information from Valeria López
