The peso closed the session with a depreciation of 0.49% or 10.4 cents, trading around 21.47 pesos per dollar, losing ground along with most currencies in the basket of main crosses, after the dollar-weighted index strengthened.

The behavior of the foreign exchange market can be divided into two parts. First, the dollar weakened after the publication of applications for unemployment support in the United States, which again showed weakness in the labor market.

This allowed the exchange rate to fall to a minimum not seen since March 11 of 21,2082 pesos per dollar.

Later, the dollar strengthened, in the face of greater demand as a refuge, as a return in the perception of risk was observed in global financial markets.

The losses were mainly observed in the capital market, mainly in issuers in the technology sector.

In the session, the Dow Jones registered a drop of 1.45%, while the S&P 500 lost 1.76% and the Nasdaq lost 1.99%. The foregoing is evidence that, for market participants, the issuers of the technology sector are still overvalued and yesterday’s gains were only the result of opportunity purchases.

In the foreign exchange market, the most depreciated currencies were the South African rand, which lost 1.82%, the British pound, which fell 1.68%, and the Israeli shekel, which lost 0.97%. The Mexican peso was the sixth most depreciated currency of the day.

Indicators of Banxico

In contrast, among the most appreciated currencies, the Turkish lira stood out with an advance of 0.51%, the South Korean won with 0.35% and the Swiss franc with 0.20%. Other currencies that also gained were the euro with 0.11% and the Japanese yen with 0.03 percent.

The peso and the risks

In the session, the Global Risk Perception Base Indicator (PPI) stood at 139 units, which implies perception for moderate risk. The components of the money market, commodities, currencies and capitals showed consistent results with higher perception by risk. For its part, the country risk component showed mixed results.

In the session, the exchange rate touched a minimum of 21.2082 and a maximum of 21.4966 pesos, the euro touched a minimum of 1.1801 and a maximum of 1.1917 dollars per euro. Finally, the euro peso touched a minimum of 25.2102 and a maximum of 25.4048 pesos per euro.

At the close, the interbank quotes for sale stood at 21.4657 pesos per dollar, 1.2793 dollars per pound and 1.1814 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE