The Mexican peso work with ups and downs against the US dollar this Thursday. The local currency is volatile after reaching its weakest level in more than a month early, a day after the announcements of the Federal Reserve.

The exchange rate stands at 20.6900 units compared to a close of 20.7283 units yesterday, with data from the Bank of Mexico (Banxico). That means a marginal appreciation of 3.83 cents, which is equivalent to 0.19 percent.

Early on, the cross reached a maximum of 20.8109 units, its weakest level since December 22, due to a strengthening of the dollar after the central bank confirmed that its monetary policy would be more restrictive.

The Dollar Index (DXY), which measures the dollar against a basket of six benchmark currencies, advanced a strong 1.23% to 97.13 units. The market is responding to little clarity on the number of interest rate hikes it will make in the year.

The government said it was likely to raise rates in March and reaffirmed its plans to end its purchases of pandemic-era bonds that month, before embarking on a major reduction in asset holdings.

With a ceiling of 97.27 points, the dollar has reached a level not seen since July 2020 against its major pairs. This is also after it was reported that the US economy grew more than expected in the fourth quarter.

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