Bets against the peso increase

The net positions against the Mexican peso have already been running for three weeks in the Chicago Futures Market (CME), going from 51,726 to 56,376 negative or net long contracts.

The latest data corresponds to the week of December 28, 2022 to January 3, 2023, and “is a signal from the markets about the risks of an upward correction in the exchange rate for the coming months,” explained Gabriela Siller. , Director of Economic Analysis at Banco Base.

The expert foresees that in the following months the flow of dollars to Mexico through exports, remittances and foreign direct investment will slow down. In addition, she commented on her Twitter account that the technical indicators also suggest that the correction in the exchange rate will occur in the medium term.

The last three weeks marked a sudden change in investor expectations about the direction of the super peso for 2023, since the peg of the Mexican currency to the United States economy makes it vulnerable to the possibility of a recession.

Prior to this negative streak, contracts in favor of the peso totaled 8 weeks between October 19 and December 13, 2022. They reached their highest point the week ending November 15 with 67,900 positive or net short contracts.

Last week, bets against the peso totaled 9,960 contracts, according to Banco Base, reaching a historical level of 187,577 contracts.

Speculative positions in favor of the peso increased by 5,301 units with a total of 131,201 contracts, for a net balance of 56,376 negative contracts at 500,000 pesos each.

Best start to the year since 2018

In its first 5 days of operations of 2023, the Mexican peso appreciated 1.8%, going from 19.5089 to 19.1580 units per greenback and closed its best start to the year since 2018 when it gained 2.19% against the US dollar.

The greatest gain corresponds to Friday when it appreciated 0.89%, after the publication of the non-farm payroll report in the United States, which highlighted the creation of 223,000 jobs in December and a reduction in the unemployment rate that it reached 3.5%, its lowest level in the year.

The peso was the second most appreciated currency in the week, only behind the ruble, which gained 2.31%, according to Banco Base. Other currencies that advanced were the Chilean peso (1.18%), the Chinese yuan (1.01%), the Canadian dollar (0.77%) and the Brazilian real (0.77%).

The dollar index, which measures the US currency against six benchmark currencies, fell 1.13% to 103,645 points on Friday but rose 0.37% for the week.

victor.barragan@eleconomista.mx