The peso closed the week with a depreciation of 0.82% or 14.8 cents, trading around 18.24 pesos per dollar, with the exchange rate touching a minimum of 17.8718 and a maximum of 18.4663 pesos per dollar, approaching the maximum exchange rate of the month of 18.4863 pesos observed on October 6.
It is important to mention that on Thursday the exchange rate closed above 18.30 pesos per dollar, something that had not happened since April 6. Likewise, in the last three sessions of the week the exchange rate closed above 18.20 pesos per dollar, something that had not happened for three consecutive sessions since March. This behavior of the exchange rate is consistent with a consolidation at current levels, as well as a high probability that an upward trend will be observed and that it will pierce the resistance of 18.50 pesos per dollar.
From the minimum in the year of 16.6262 pesos per dollar reached on July 28 and until today’s close, the peso shows a depreciation of 9.69% or 1 peso and 61 cents.
For its part, compared to the end of 2022, the peso shows an appreciation of 6.47% or 1 peso and 26 cents.
The depreciation of the peso during this week was due to the following factors:
1. Greater risk aversion due to the conflict in Israel, which intensified towards the end of the week due to paramilitary groups in the Gaza Strip and Lebanon. Because there is a risk that the conflict will spread to other countries, there are fears that it could affect the production and trade of . Therefore, in the week the price of oil closed with a gain of 1.21%, trading at 88.75 dollars per barrel, reaching a maximum of 90.78 dollars per barrel. In the last two weeks, the price of WTI accumulates an increase of 7.20%. This conflict in Israel has the potential to have a political impact on the United States elections around 2024, since typically when the United States government becomes directly or indirectly involved in a war conflict, citizens tend to re-elect the president who is in the power. This is why President Joe Biden is assuming a mediation position, but clearly reiterating his support for Israel.
2. The expectation that the Federal Reserve will maintain a restrictive monetary stance for an extended period of time. According to the comments of several Fed officials, they prefer to keep the rate unchanged on November 1 pending more economic information. However, they have reiterated that the monetary stance will continue to be restrictive next year. Looking at previous cycles that the Federal Reserve has taken a restrictive stance, it is likely that they will decide to keep the rate unchanged until the second half of 2024, rather than make additional increases. The above would imply that the rate would remain unchanged for a period of at least 11 months. During the week, the 10-year Treasury note rate rose 30.1 basis points, the largest weekly increase since April 8, 2022, standing at 4.91% and touching a maximum of 4.9927%, a level not seen since April 20. July 2007.
3. During the week, risk aversion to Mexico increased.
3.1 In the Chamber of Deputies, the initiative for the Income Law was approved in general and in particular, which is part of the 2024 Economic Package, which contemplates a budget deficit of 4.9% of GDP, something not seen since 1988.
3.2 It was announced that the controversy panel requested by the United States against Mexico over GMOs has already been selected. The panel of experts will announce its resolution within 180 days. If the panel rules against Mexico, trade sanctions would be imposed that could result in fines or tariffs.
3.3 The disappearance of the trusts of the Judicial Branch of the Federation, which totaled at least 15 billion pesos, was approved in the Chamber of Deputies.
3.4 The risk of intervention by the Mexican government in the private sector continues. It should be noted that the construction company Vulcan Materials wrote a letter to the Department of State and the United States Government to protect its employees and property in Mexico. According to the company, the businessmen learned through the press that AMLO intends to acquire the 2,400 hectares of land south of the tourist city of Playa del Carmen for 360 million dollars, something they consider an undervaluation of the assets.
3.5 The agreement to adjust the rights of airport concessions was published, where it was announced that airport contributions will go from 5% to 9% of the concessionaire’s gross income. These changes will affect the income of airport groups.
3.6 The Chamber of Deputies approved the creation of the trust for Sedena, which will be allocated to the Maya Train and to pay for the operation, provision of services, administration, and construction of the project. The trust will grant 120 billion pesos to the Mayan Train for next year.
Due to the aforementioned factors, in the week between Wednesday, October 11 and Tuesday, October 17, net speculative positions waiting for an appreciation of the peso in the Chicago futures market showed a drop of 7,928 contracts, reaching 44,305 contracts, each of 500 thousand pesos. With this, in the last two weeks the net positions in favor of the peso show a drop of 20,209 contracts. Internally, gross positions awaiting an appreciation of the peso fell by 7,174 contracts, reaching 63,351 contracts, their lowest level since March 22, 2022. For their part, gross positions against the peso increased by 754 contracts, standing at 19,046 contracts.
In the broad basket of main crosses, the most depreciated currencies in the week were: the Israeli shekel with 1.96%, the Indonesian rupiah with 1.21%, the Norwegian crown with 1.08%, the New Zealand dollar with 0.97%, the Malaysian ringgit with 0.83% and him with 0.82%. The most appreciated currencies were: the Polish zloty with 2.49%, the Hungarian forint with 2.46%, the Russian ruble with 2.08%, the Czech crown with 1.18% and the Swiss franc with 1.11%. The dollar closed with a decline of 0.11% according to the weighted index.
In the week of October 5 to 11, total loans and leases granted by commercial banks in the United States showed a growth of 0.09%, reaching a total of 12,211.70 billion dollars, according to seasonally adjusted figures. Internally, only real estate loans registered a weekly drop (-0.03%), accumulating 3 consecutive weeks of decline. In the accumulated of the year (41 weeks), loans from all commercial banks in the United States show an accumulated growth of 7.8% compared to the same period in 2022. The above is compared to the accumulated growth of 8.3% in the first 41 weeks of 2022 compared to the same period of 2021. Within the loans, the following accumulated growth is observed: commercial and industrial loans (+6.1%), 2) real estate loans (+9.1%), 3) consumer loans ( +7.9%) and other loans (+6.6%).
The Federal Reserve also released the figures for total deposits of all commercial banks. During the week of October 5 to 11, deposits registered a weekly decline of 0.05% or 8.74 billion dollars, being the second consecutive week of decline. In the week, deposits reached a total of 17,364.09 billion dollars. Internally, the fall was explained by the other deposits subcomponent (-0.13%). During the year, deposits from all commercial banks in the United States show an accumulated decline of 3.6% compared to the same period in 2022.
For the week, the euro hit a low of 1.0507 and a high of 1.0616 dollars per euro. The pound hit a low of 1.2090 and a high of $1.2220 per pound. For its part, the euro peso hit a minimum of 18.8558 and a maximum of 19.5363 pesos per euro.
2023-10-21 07:20:07
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