Within the last 12 sessions, the Mexican currency registers 10 days appreciating against the US dollar, going from 21.2650 pesos per dollar on December 14 to 20.4696 units this Thursday, accumulating an appreciation of 3.74% in that period.
Only in the day of this Thursday, the local currency ended with a gain of 0.46% or 9.50 cents compared to the previous close, according to data from Banco de México.
Gabriela Siller, Director of Economic Analysis at Banco Base, commented that “With today’s appreciation, the exchange rate has pierced the support of 20.50 pesos indicated by the 100-day moving average and the door opens to a greater appreciation of the peso. towards the 200-day moving average at 20.27 pesos per dollar and then towards the level of 20.25 pesos per dollar, not seen since October ”.
In December, the Mexican peso has an appreciation of 4.65%, in addition to spinning four consecutive weeks of appreciation. However, the strength in the last sessions did not erase the losses in 2021, as the peso is about to end the year with a depreciation of 2.60 percent.
“The appreciation of the peso is also supported by the expectation that Banco de México will probably continue to raise its interest rate in 2022, before the Federal Reserve begins the cycle of increases to its target rate. This is due to the persistence of inflationary pressures in the underlying component ”, explained Gabriela Siller.
According to the stock market advisory firm Black Wallstreet Capital, “in 2021 a general strengthening of the USD was observed due to inflationary pressures and expectations of the start of tapering, as well as the increase in the reference rate. Our baseline scenario is that the USD maintains the rate of strengthening compared to other currencies, especially emerging ones ”.
Going forward, as the Fed is projected to move away from its loose monetary stance more aggressively, the US dollar is likely to strengthen. This could also imply episodes of weakness for currencies of emerging economies, such as the Mexican peso, “concluded Siller.
Reference-www.eleconomista.com.mx