Peso falls slightly before the dollar advances; closes at 20.98 units

The Mexican peso depreciated slightly against the American dollar this Thursday. The local currency lost ground after it was learned that Mexico’s inflation accelerated to its highest level in more than two decades.

The exchange rate ended operations at 20.9898 units per dollar against 20.9652 units yesterday, with data from the Bank of Mexico (Banxico). That was a loss of 2.46 cents, equivalent to 0.12 percent.

The cross operated in a limited range between a maximum of 21.0772 units and a minimum of 20.9191 units. The Dollar Index (DXY), which measures the greenback with a basket of six coins, rose 0.36% to 96.24 points.

Relevant data

Inflation in Mexico marked a year-on-year advance of 7.37%, its highest record in two decades and well above Banxico’s target of 3% +/- 1 percentage point. The monetary authority could raise its rate again.

In addition, in the foreign exchange market, a strengthening of the dollar was observed caused by new restrictions on activities in some parts of the world, implemented to reduce the spread of Covid-19.

Traders await the release of US inflation data tomorrow. The figure will be essential to anticipate future decisions by the Federal Reserve, especially a possible acceleration of tapering.

“The market weighs the inflation figure for November [en Estados Unidos] which is published tomorrow. The figure is expected to continue to be at high levels, “explained Grupo Ve por Más in a report.

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