Mexican peso depreciates and falls for the third consecutive week

The Mexican peso depreciated against American dollar this Friday. The local currency extended its losses for the fourth day in a row, in a market worried about the possibility that rate hikes could cause a recession in the global economy.

The exchange rate ended this session at the level of 19.8289 units per dollar against a record of 19.7321 units yesterday, with official data from the Bank of Mexico (Banxico). That means a loss of 9.68 cents for the currency, equivalent to 0.49 percent.

The crossing operated in an open range between a maximum of 19.8831 units and a minimum of 19.7418 units. The Dollar Index (DXY), which compares the greenback against a basket of six strong reference currencies, advanced 0.14% at the close to 104.70 units.

This week the fight against inflation began a new phase, with authorities such as the Federal Reserve and the Bank of Mexico marking a slowdown in the pace of rate hikes, but anticipating a long period of increases and high interest rates.

The fall of the peso was also presented before an increase in volatility in the market due to the atypical behavior this Friday due to the expiration of futures and options contracts in the United States, known as “Quadruple Witching Day”.

“Both the Federal Reserve and the European Central Bank estimated that inflation will take longer to fall. Given this, and although at a slower pace, they anticipate that interest rates will continue to rise and remain high for a longer time,” Ve said. for More.

The nervousness in the market led the peso to post a moderate weekly drop, against 19.7787 pesos from its close last Friday, the local currency gave up 5.02 cents or a variation of 0.25 percent. This is his third consecutive weekly loss.

jose.rivera@eleconomista.mx