The peso closed the session with an appreciation of 1.53% or 37 cents, trading around 23.82 pesos per dollar, gaining ground after Banco de México decided to cut the target interest rate by 50 basis points to 5.50 percent.

Although the cut was expected by the market, the peso appreciated as the statement mentioned that the outlook for inflation is uncertain, so they will not necessarily cut the interest rate rapidly. With today’s cut, the real interest rate stands at 3.35%, being the highest in Latin America and one of the highest globally.

The peso and fees

It should be noted that the last two cuts to the Banco de México interest rate were made outside the calendar, so that, given a sudden deterioration in macroeconomic conditions, it is not ruled out that the Governing Board may re-adjust the interest rate. interest ahead of schedule.

The next monetary policy announcement by Banco de México is scheduled for June 25 at 1:00 p.m. Towards the end of the year, the expectation of further cuts to the interest rate to a level of 4 percent remains.

The Mexican peso was the currency most appreciated in the basket of major crosses, followed by the Brazilian real, which rose 1.23% and the Canadian dollar, which appreciated 0.46%. These currencies were driven by an increase in the price of oil in the commodity market.

Petroleum

The WTI price registered an increase of 8.86% to $ 27.53 per barrel, after it was revealed that OPEC + countries cut their exports by 5.96 million barrels per day during the first half of May.

For its part, the International Energy Agency said that the outlook for the markets has improved, since greater demand than expected has been observed, while supply has been reduced due to the drop in prices.

Towards the end of the week, the number of indicators and relevant economic events will decrease, highlighting in the United States retail sales for April, as well as industrial production for the same month, which is expected to show a monthly contraction of more than 10 percent

Quotes

In the session, the exchange rate touched a minimum of 23.7524 pesos and a maximum of 24.3779 pesos. It is important to note that, despite the appreciation of the peso, the parity continues to respect the support of 23.80 pesos per dollar, a level that was momentarily drilled to return to the level of 23.82 pesos.

The euro-peso reached a minimum of 25.6567 and a maximum of 26.3046 pesos per euro in the interbank prices for sale. For its part, the euro touched a minimum of 1.0775 and a maximum of 1.0824 dollars per euro.

At the close, the interbank quotations for sale were 23.8210 pesos per dollar, 1.2231 dollars per pound and 1.0802 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE