Peso depreciates marginally in its first fall of 2023

The Mexican peso depreciated marginally against the US dollar on Wednesday. The local currency fell for the first time in 2023 and ended a streak of gains, after the market received the minutes of the December meeting of the Federal Reserve.

The exchange rate ended this session at the level of 19.3985 units against a record of 19.3861 units per dollar yesterday, with official data from the Bank of Mexico (Banxico). That’s a move of 1.24 cents, which is equivalent to a marginal 0.06 percent.

The cross operated in an open range between a maximum of 19.4239 units and a minimum level of 19.2578 units, its best record since the beginning of December. The Dollar Index (DXY), which measures the greenback against six currencies, fell 0.24% to 104.26 units at the close.

Members of the Federal Reserve’s Federal Open Market Committee agreed on concerns about a “misperception” in financial markets that their commitment against strong inflation is beginning to wane, the minutes showed.

In the minutes of its December policy meeting, which closed with a 50 basis point rate hike after four consecutive 75 rate hikes, it was also noted that all members considered it inappropriate to cut interest rates this year.

“No participant [del encuentro] anticipates that it may be appropriate to cut interest rates in 2023,” the documents said, supporting fears that the prolonged period of high rates could lead to a recession in the United States.

The operators hope that tomorrow Banxico will provide more signals on the future of monetary policy, with the minutes of its December meeting. The market is also awaiting the economic figures from the United States for the end of the week.

jose.rivera@eleconomista.mx