Weight cuts fall after hitting its worst level in more than eight months

The Mexican peso lose against him American dollar this Wednesday and outlines its fifth consecutive fall. In the middle of the session, the local currency remains in the red, although it cuts the decline after touching its worst level since March.

The exchange rate stands at 21.4501 units against a close of 21.2275 units yesterday, with the official data from Bank of Mexico (Banxico). That means a weight loss of 22.26 cents, which is equivalent to 1.05 percent.

At its worst of the session, the cross peaked at 21.6140 units, a high not seen since March 8. The strength of the greenback and local information pushed up from the beginning of this day.

Strong dollar

The Dollar Index (DXY), which measures the US currency with a basket of six reference currencies, currently rises 0.44% to 96.92 points. With a maximum of 96.94 points, it reached its highest level early since July 10, 2020.

Bets on a rise in interest rates on the Federal Reserve they have been strengthened. Rates of return on Treasuries are advancing and approaching their highest for the year, something that boosts the performance of the greenback.

The improvement continues in the labor market and consumer spending in the United States, suggesting that the central bank would have a greater chance of raising its rate to respond to an environment of rising inflation.

This advance in the dollar is also caused by greater fears related to the closures of productive activities in some European countries due to coronavirus, which led the euro to hit a 16-month low.

Local information

At the local level, some analysts mentioned as a factor of uncertainty that President Andrés Manuel López Obrador announced that he will propose the Undersecretary of Expenditures, Victoria Rodríguez, to lead Banxico.

Victoria Rodríguez, “has vast experience in public finance, but not in the management of monetary policy,” said the financial group Monex. The president’s announcement “creates uncertainty,” says his note.

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