The Mexican currency scored its best close against the dollar in almost three years on Tuesday, due to the expectation of a moderation in inflation in the United States, analysts explained.
The peso appreciated 0.5% and ended at 19.07 units per dollar, its strongest close since February 24, 2020, when the pandemic had not yet been declared and the currency ended at 19.06, according to the wholesale operations reported by Bloomberg.
experts from Banorte related the gain of the peso with the expectation of a moderation of inflation in the American Union, whose result to December will be announced tomorrow.
The Mexican peso was the fifth most appreciated currency on Tuesday, said Janneth Quiroz Zamora, deputy director of Monex Analysis.
From your point of view, The appreciation of the peso also had to do with the inflow of foreign investment in government securities disclosed by the Bank of Mexico (Banxico).
At retail, the dollar ended up selling for 19.53 pesos at CitiBanamex windows, six cents less than on Monday.
Market participants focused yesterday on Jerome Powell, Chairman of the US Federal Reserve (Fed), who said that “restoring price stability may require unpopular actions.”
The lack of more specific comments from Powell gave stock markets some breathing space, Banorte said.
JP Morgan director Jamie Dimon said interest rates may rise more than what the market has discounted. For its part, the World Bank revised downward its global growth forecast from 3% to 1.7%.
However, some participants preferred risky assets, betting on a moderation of US inflation.
In Banorte they highlighted that a White House official said that President Joe Biden asked Janet Yellen a few weeks ago to remain as Treasury secretary, which she accepted. “This guarantees stability in the government prior to the discussion in Congress on the debt ceiling,” they opined.
The peso adds seven consecutive sessions gaining ground, accumulating an appreciation of 2.2% or 43 cents in this period, stressed Gabriela Siller, chief economist at Banco Base.
“From a technical approach, if the key level of 19.04 pesos per dollar is broken, it could go to the support of 18.94 pesos. The last time the exchange rate was below 19.00 pesos per dollar was February 25, 2020”, projected the specialist.
The consensus of analysts foresees that the Mexican peso will end this year at 20.50 wholesale units, according to the results of the survey that CitiBanamex applied to 30 institutions last week.
The British bank Barclays was the most optimistic participant, with a projection of 19 pesos, while at the other extreme, as the pessimist, was Monex, whose expectation indicates an exchange rate of 21.30 units at the end of the year.
By the end of 2024, the exchange rate is projected at 21.00 pesos, although there are institutions such as the French Natixis that anticipate a level of 19.90, while Monex continues to appear at the other pole, with a forecast of 22.50 units.
The peso was the second currency with the highest gains in 2022, only behind the Brazilian real, due to the confidence of foreign investors due to healthy public finances, higher interest rates from Banxico, family remittances, the recovery of tourism, reserves international markets, the flexible credit line of the International Monetary Fund (IMF) and merchandise exports, explained Gerardo Copca, analyst at MetaAnalysis.
To try to curb inflation, Banxico last year raised its main rate from 5.5% to a record high of 10.5%.
Most analysts anticipate that the authority will apply another increase to 10.75% on February 9, according to the CitiBanamex survey.
The country received remittances for more than 53 billion dollars from January to November of last year and it is a historical flow for a similar period, according to data from Banxico.
Mexico captured 25 billion dollars for the spending made by foreign visitors during their travel and stay during the first 11 months of the year and it is also a historical maximum for an equal period, indicate the results of the International Traveler Surveys of the Inegi.
Mexico sold merchandise abroad for 528 thousand 870 million dollars from January to last November, 18.3% more than in 2021 and a maximum for a similar period, reports the Inegi.
The Mexican Stock Exchange accumulated seven days of gains and ended yesterday at 52,344 points and it was its best close since May 27 of last year. Of the most traded companies, Grupo México stands out, whose share rose 2.4% yesterday.
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