Thursday , October 28 2021

Pesso scores for the fourth consecutive week – Economics


Mexico City, From August 5 to 9, the peso registered a decrease of 0.50 percent or 9.7 cents, trading around 19.40 pesos for a dollar and touching a maximum of 19.7397 pesos; This is the fourth consecutive week the national currency is losing ground.

According to Banko Baz, the downturn was concentrated earlier this week with an increase in risk aversion between global financial markets due to the escalation of the China-US trade war and a failure in the negotiations between the two countries,

Earlier this week, the exchange rate also rose due to speculation that a currency war would start, especially after the National Bank of China allowed the yuan to depreciate at levels above seven units per dollar, trading at levels not seen since 2008. .

Along with the Mexican peso, other currencies lost ground in the week. Globally, they also lost most of the capital markets with weekly declines in Asia, Europe and the United States.

By the end of the week, the peso cut its losses after evidence that the Chinese National Bank prevented the Chinese yuan from continuing to depreciate.

Thus, the exchange rate reached a minimum of 19.2872 and a maximum of 19.7397 pesos per dollar during the week.

However, the financial firm predicted that the exchange rate could rise again in the coming sessions, given the risk of a trade war escalating.

In addition, next week market participants will be watching for the announcement of the Banco de México (BdeM) monetary policy scheduled for August 15, where the market gives a 35% chance that the Governing Council will reduce its interest rate.

Due to the importance of the event, the exchange rate is expected to show lower volatility in the first days of the week, in anticipation of BdeM.

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