Monday, December 11, 2023

Peso appreciates after positive economic and inflation data in Mexico

The peso rose after two consecutive periods of losses, helped by the release of data in Mexico that showed economic activity continued to increase in July, while inflation slowed again in the first half of September.

The Mexican currency was trading at 17.2035 units per dollar near the end of trading, up 0.12% from Thursday’s Reuters benchmark price. In the previous two sessions, the peso recorded a decline of 0.86%.

“From a technical perspective, the exchange rate has consolidated in a channel between 17.05 and 17.20 pesos per dollar, proving that there are still factors supporting its downward trend,” Banco Base said in an analysis note.

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“However, indicators suggest that the downward trend in the exchange rate is no longer as strong. Although the exchange rate is expected to return to around 17 pesos per dollar, values ​​below 16.90 are less likely in this context,” he added.

The peso’s rise led gains for the region’s major currencies on Friday, but resulted in a slight loss of 0.82% for the week.

The stock market has two sessions of pullbacks

Meanwhile, the Mexican stock market fell for a second straight day as investors continued to digest monetary policy announcements from various central banks this week, including the Federal Reserve (Fed), which suggested its strategy would remain hawkish for longer.

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The benchmark S&P/BMV IPC stock index fell 0.53% to 51,677.48 points, but still posted its first week of gains since late July with a cumulative return of 0.63%.

Shares of airline Volaris led the decline, down 5% to 13.67 pesos per share, followed by shares of Pinfra, which is mainly dedicated to the construction and operation of roads, down 2.52% to 156.91 pesos deducted.

In the debt market, the 10-year bond yield rose one basis point to 9.80%, while the 20-year bond yield rose three basis points to 9.88%.

Nation World News Desk
Nation World News Desk
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