The peso-dollar exchange rate closed on Friday below 18 units per dollar, a level not seen since March 3 when it ended at 17.9888 units per greenback.
The peso appreciated 0.11% on Friday, or 2.08 cents, to 17.9855 units per dollar. In the week it advanced 0.22 percent.
“The price of the peso below 18 units per dollar responds to the weakening of the dollar,” explained Janneth Quiroz, deputy director of Analysis at Monex Casa de Bolsa.
The Dollar Index, which measures the strength of the greenback against a basket of six reference currencies, had a slight drop of 0.02% on Friday, to settle at 101.82 units, while it gained 0.27 percent during the week.
Quiroz said that the stability of the peso in recent sessions is due to the fact that in April there were no monetary policy meetings in the United States or Mexico.
Relevant economic information is expected this week. On Monday, the inflation data for the first half of April will be released in Mexico, with which signs of the possible movement of Banco de México rates are expected. The preliminary figure for the US Gross Domestic Product for the first quarter will also be released.
This last piece of information, added Janneth Quiroz, will be very important because it can cause a break in the laterality of the weight observed in recent days.
James Salazar, deputy director of Analysis at CI Banco, commented that the price of the peso has remained sideways, since no catalyst has appeared to help it have a positive rally.
“The exchange rate is still trapped in a very limited range, it will surely touch the level of 17.90 pesos per dollar again and for the appreciation trend to intensify again, the interest rate differential between Mexico and the United States would be needed expands, which seems unlikely because the Federal Reserve and Banxico already want to end the rate tightening cycle,” he added.
in favor of weight
The bets in favor of the peso were maintained for the sixth consecutive week in the Chicago Futures Market, although the contracts registered a lower demand compared to the previous report.
This is because between April 12 and 18, net long contracts totaled 56,171, of 500,000 pesos each, a figure 7.1% below what was reported for the week of April 11.
Janneth Quiroz said that speculators’ positions still favor the peso because they believe it will appreciate, since risk aversion due to fears of a crisis in the US banking sector has decreased.
In addition, the market expects that there will only be an increase of more than 25 base points in the reference interest rate of the Federal Reserve (Fed), with this, the terminal rate would reach a level of 5.25 percent.
While the consensus expectation of analysts for the reference interest rate of Banco México is divided, there are those who expect an additional increase of 25 base points and those who no longer expect increases.
