Weight touches its best level of the year; awaits decision on Banxico rates

The Mexican peso appreciated against the American dollar this Wednesday, one day before the monetary policy announcement of the Bank of Mexico (Banxico). Rate hike bets pushed the pair to its best level in 2022.

The exchange rate ended the session at the level of 20.1876 units compared to 20.2786 units yesterday, with data from Banxico. This means an appreciation of 9.10 cents for the local currency, equivalent to 0.45 percent.

The pair traded in an open range between a high of 20.2900 and a low of 20.1562, its best reading since late October. This occurred despite the dollar advancing against its major peers.

Local operators expect to know Mexico’s fortnightly inflation data tomorrow and, hours later, the central bank’s monetary policy announcement. Bets are charged for a seventh interest rate increase.

The Federal Reserve The US (Fed) raised its interest rate last week for the first time in four years. Its chairman, Jerome Powell, said rates could be raised more aggressively if inflation doesn’t ease.

Analysts believe that the Fed’s position in an environment of persistent inflation and the increase in commodity prices due to the war between Russia and Ukraine causes the market to consider a strong increase.

“It has been discounted that Banxico will raise its rate by 50 basis points tomorrow, further increasing the spread with developed economies, which has translated into an appetite for the peso,” Intercam explained.

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