Mexican peso depreciates due to doubts about rate increases in the US

The Mexican peso depreciated against American dollar this Friday. The local currency fell due to market concerns about the next steps to be taken by the Federal Reserve (Fed) in its fight against persistent inflation.

The exchange rate ended this day at the level of 19.4354 units against the record of 19.4156 units yesterday, with data from the Bank of Mexico (Banxico). That meant a fall of 1.98 cents, which is equivalent to a variation of 0.10 percent.

The crossing operated in an open range between a maximum of 19.5359 units and a minimum level of 19.3826 units. The Dollar Index (DXY), which compares the greenback with a basket of six benchmark currencies, advanced 0.19% to close at 106.90 units.

The fall of the Mexican currency is an extension of the decline recorded after comments by some Fed officials hit investor sentiment, eliminating all expectations of an early end to rate hikes.

St. Louis Fed President James Bullard said Thursday that even with “generous” analysis, interest rates should continue to rise as there have been only “limited effects on observed inflation” in the United States so far. .

During the week, the exchange rate moved between a maximum of 19.5735 units and a minimum of 19.2504 units. “From a technical point of view, the exchange rate is testing the resistance of 19.50 pesos per dollar,” Banco Base analysts explained.

jose.rivera@eleconomista.mx