Stock markets and Mexican peso close in the red

The peso and Mexico’s stock markets fell on Thursday after the Bank of Mexico (Banxico) moderated its pace of monetary tightening, but warned that at least one more increase would come, following the steps taken the day before by the Federal Reserve (Fed) of the United States, sparking renewed concerns about global economic growth.

In the financial markets, weak data from the US economy and negative prospects from the Economic Commission for Latin America and the Caribbean (Cepal) on the economic recovery of the region also weighed on, analysts agreed.

The peso closed at 19.7321 units per dollar, according to data from the Bank of Mexico (Banxico), with a depreciation of 0.28% compared to data from Wednesday, when it lost 0.55 percent. The peso-dollar parity operated in an open range between a maximum of 19.8577 units and a minimum of 19.6215 units per dollar.

The Mexican currency depreciated against the dollar this Thursday, due to a strengthening of the greenback, in a market nervous about the possibility of the Fed’s rate hikes causing a recession in the United States.

The Dollar Index, which measures the greenback against a basket of six strong reference currencies, advanced 0.73% to 104.53 units.

“We believe that Banxico intends to continue raising rates in line with the Fed,” said Priscila Robledo, chief economist at investment firm Fintual.

“In that sense, most likely it will raise rates a couple more times, although it may slow down again,” he explained.

The main index of the Mexican Stock Exchange, the S&P/BMV IPC, fell 1.41% to 49,342.34 points, spinning its fourth consecutive day of losses, with an accumulated decline of 3.4 percent.

For its part, the Institutional Stock Market index, the FTSE-BIVA, fell 1.35% to 1,030.26 integers.

In the debt market, the yield on the 10-year bond fell one basis point to 8.78%, while the 20-year rate rose one basis point to 9.02 percent.

termometro.economico@eleconomista.mx