The Mexican peso lost ground against him American dollar this Monday. The local currency fell against a stronger dollar on the back of Treasury bond yields, which hit a high of almost two years on this day.
Bets on interest rate hikes in the United States are growing because the Federal Reserve (Fed), released last week, opened up the possibility of a rate move earlier than expected.
The exchange rate ended the day at 20,3896 units against a record of 20,3709 units on Friday, with data from the Bank of Mexico (Banxico). This was down 1.87 cents or a moderate 0.09 percent.
During operations, the peso depreciated to 20.5230 units per greenback, after the dollar advanced due to market bets for a period of higher rates in the world’s largest economy.
The International Monetary Fund (IMF) warned that emerging economies should prepare for US rate hikes because they could shake markets, cause capital outflows and depreciations.
“Expectations are growing that US inflation, to be released on Wednesday, will reinforce the case for raising the rate earlier than expected,” said Janneth Quiroz, Monex’s deputy director of analysis.
At the close of Banxico, the Dollar Index (DXY), which measures the greenback with a basket of six reference currencies, was up 0.30% to 96 points. The dollar also gained due to the fear in the market to the Covid-19.
Infections have rebounded due to the Omicron variant. Mexico reached a record of daily confirmed cases since the pandemic began. According to official data, it marked 30,000 new registrations on Saturday.
Reference-www.eleconomista.com.mx