Peso trims loss after moderation in Federal Reserve rate hike

The Mexican peso depreciated against the US dollar on Wednesday. The local currency fell moderately after registering a strong gain the day before, in a market that assimilates the new panorama of inflation y interest rates in USA.

The exchange rate ended this day at the level of 19.6777 units against a record of 19.5694 units yesterday, with official data from the Bank of Mexico (Banxico). This movement meant a loss of 10.83 cents or 0.55 percent for the local currency.

The cross traded volatile in an open range between a maximum of 19.7615 units and a minimum level of 19.5170 units. The Dollar Index (DXY), which compares the greenback with a basket of six reference currencies, lost 0.30% to 103.67 units at the close.

The local currency fell at the opening after appreciating yesterday due to a decrease in inflationary pressure in the United States in November. It later eased its decline after the latest monetary policy announcement from the Federal Reserve (Fed) of is 2022.

The central bank raised its reference rate by half a percentage point on Wednesday in line with what was expected by the market, after four increases of three-quarters of a point, but said that it will continue raising the price of money and will take it above 5 percent.

The president of the US monetary authority, Jerome Powell, said that the recent inflation data shows less pressure on prices, but it is still not enough for the central bank to change its outlook on inflation.

The Fed raised its inflation forecast for 2023 to 3.1% from 2.8% in the previous projection, and also cut its growth forecast for the world’s largest economy next year, to 0.5% from 1.2%, according to the statement issued after the announcement. .

jose.rivera@eleconomista.mx