Chicago in favor of the Mexican currency for 5 consecutive weeks

The net positions in favor of the Mexican peso now add up to their fifth consecutive week on the Chicago Mercantile Exchange (CME), after they bet on the depreciation of the Mexican currency for 19 consecutive weeks.

In the week of November 16 to 22, 63,300 positive or net long contracts were recorded at 500,000 pesos each, 4,600 units less than the previous figure of 67,900 contracts in favor of the peso.

It is its second best level since the week ending March 8, 2022, when 53,000 net long positions were reported.

The preference for the Mexican peso has intensified in recent weeks thanks to its outstanding performance in the foreign exchange market, surpassing other currencies in the region such as the Brazilian real and the Peruvian sol.

Along with the increase in contracts in favor of the Mexican currency, its price against the dollar has remained below 20 units with an appreciation of 2.57% so far in November and continues to drop to levels not seen since February of 2020.

“Recently, the trend has not continued to drop, at the moment the exchange rate has developed a sideways behavior,” said Janneth Quiroz, deputy director of analysis at Monex Casa de Bolsa.

The expert has an estimate of 20.30 units per dollar for the end of the year, which would represent a depreciation of 5.18% as of the close of this Monday.

He added that the probability that the peso will close below 20 units per dollar has increased considerably thanks to the factors that are supporting the behavior of the exchange rate.

Before this five-week streak, the Chicago futures market had bet on the depreciation of the peso for a period of 19 weeks between June 14 and October 21 of this year.

The largest bet against the peso corresponds to the week ended September 27 with 41,300 negative or net short contracts. Although this is not the longest streak against the peso in recent years, since between May 2021 and the first half of January of this year the contracts against the peso totaled 36 weeks in a row.

Of the 51 weeks that the Chicago futures market operated in 2021, 44 accumulated bets on the depreciation of the Mexican peso.

victor.barragan@eleconomista.mx