Peso closes the week higher; dollar is quoted at 20.18 units

Among the factors that allowed the appreciation of the peso, the “technical correction” in the exchange market stands out, recovering lost ground

The Mexican peso closed with a weekly appreciation of 0.74 percent, trading at 20.18 units per dollar in the interbank market, registering a second week up after more than a month down.

This implies a weekly gain of the peso of 15 cents compared to the exchange rate of 20.33 units per american banknote of the previous Friday, according to the data reported by the Bank of Mexico (Banxico).

Price of the dollar as of October 22, 2021

“The appreciation of the peso occurred before a decrease in risk perception in global financial markets, which allowed the peso to appreciate for the second week in a row ”, explained Gabriela Siller, director of economic analysis at Banco Base.

In the week the exchange rate it touched a maximum of 20.5 and a minimum of 20.13 pesos per dollar.

Among the factors that allowed the appreciation of the Mexican peso, the analyst highlighted a “technical correction” in the exchange market, recovering lost ground against the dollar, which in turn depreciated against other currencies.

There was also a “contagion effect of optimism in the capital market.”

In addition, he stressed that it also influences the evolution of the Mexican currency the expectation that the Bank of Mexico keep raising the interest rate in the face of inflation above 6 percent.

“In the futures market of Chicago, the net speculative positions awaiting a depreciation of the peso decreased, after four consecutive weeks of increases ”, he added.

In this way, in the foreign exchange market, the Mexican peso it was among the five most appreciated currencies during the week, he concluded.

The pandemic crisis caused a historic 8.2 percent contraction of Mexico’s gross domestic product (GDP) in 2020, the worst slump since the Great Depression of 1932.

For this year, the Government and analysts estimate a rise of at least 6 percent of GDP.

The Mexican peso, which was around 18.5 units per dollar Before the pandemic, it suffered its worst moment in March last year when it exceeded 25 units.

With information from EFE

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