The Mexican peso depreciated against American dollar this Monday. The local currency fell under pressure from a global strengthening of the greenback, in an environment of risk aversion, and after the publication of local inflation figures.
The exchange rate closed the session at 20.3402 units compared to the record of 20.1294 units on Friday, with data from the Bank of Mexico (Banxico). This meant a fall of 21.08 cents or 1.05 percent for the peso.
The pair traded in an open range between a high of 20.3931 units and a low of 20.1910 units. The Dollar Index (DXY), which compares the greenback to a basket of six currencies, was down a marginal -0.08% at 103.63.
The dollar lost part of its advance at the close after earlier reaching a ceiling of 104.19 points, at a maximum of more than 20 years, thanks to greater risk aversion and the yield of Treasury bonds.
The United States is suffering from the highest inflation in 40 years and, despite the sharp increase in rates by the Federal Reserve last week, markets are betting that the monetary authority will continue to raise the price of money.
On the other hand, nervousness about inflation has been added to the fear of low global economic growth this year, because the strict confinements in China due to spikes in Covid-19 could impact the Asian giant.
“Expectations of further tightening by the Fed to combat inflation and fears of a global economic slowdown fueled the search for safety in the dollar,” said Janneth Quiroz, deputy director of research at Monex.
Finally, in Mexico, Inegio announced in the morning that inflation accelerated in April to levels not seen in more than 21 years, reinforcing expectations that Banxico will raise its reference rate again this week.