Mexican peso depreciates after increase in coronavirus cases

The Bank of Mexico is expected to announce a new cut in the reference interest rate this Thursday.

The Mexican peso depreciated moderately this Thursday before a strong increase in the number of new cases of coronavirus which led investors to opt for safe assets while waiting for the monetary policy decision of the local central bank.

The currency traded on 18.6428 per dollar, with a loss of 0.16 percent, compared to 18,6123 of the reference price of Reuters Wednesday

Health authorities in the Chinese province of Hubei reported that 242 people had died on Wednesday because of the new virus, which constitutes the fastest daily increase since the pathogen was identified in December, which raised the total number of deaths in the province to 1,310.

Nail 60 thousand people have been infected in total, the vast majority of them in China.

Meanwhile, the Bank of Mexico probably will announce a new cut in the reference interest rate during the day, in the midst of a stagnation of the local economy and despite the fact that inflation recently exceeded the official target.

“If the expectation of a 25 basis point rate cut is confirmed at Thursday’s meeting, the reaction of the Mexican peso to the decision of Banxico will be depreciation, but marginal and temporary, ”said CI Bank in a report.

Rts

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