The peso closed the session with an appreciation of 0.20% or 4.1 cents, trading around 20.61 pesos per dollar, with the exchange rate touching a minimum of 20.5556 and a maximum of 20.7897 pesos per dollar.

The appreciation of the peso occurred after 12:00 hours, along with a decrease in the rate of return on 10-year Treasury bonds, which fell from 1.45% at its highest level during the morning to 1.40% at the market closure.

A higher demand for debt instruments was also observed in Mexico, as the yield rate of the 10-year M bonds closed with a decline of 7 basis points, reaching 6.07 percent.

In the week, this rate of return accumulates a decline of 18 basis points.

A weakening of the US dollar was also observed in the foreign exchange market, consistent with the performance of the bond market.

The dollar weighted index closed down 0.27%, with most currencies gaining ground.

The most appreciated currencies were the Norwegian krone, which advanced 0.99%, followed by the Australian dollar with 0.75% and the Swedish krona with 0.58 percent.

The Mexican peso was ranked 13th among the most appreciated currencies in the wide basket of main crosses.

The peso

Despite the appreciation of the peso during the session, from a technical point of view an upward outlook is maintained for the exchange rate, as it remains firmly above the support indicated by the 100-day moving average that stands at 20.28 pesos per dollar.

Further upward movements in the exchange rate cannot be ruled out in subsequent sessions, mainly as a result of an increase in the perception of relative risk over Mexico.

Two factors could generate nervousness in the short term:

First factor

The probable approval in the Senate of the reform to the Electricity Industry Law.

After the opinion was approved in commissions, opposition senators have jointly indicated their position against the reform.

However, the opposition parties do not have enough votes to block the approval of the reform that requires a simple majority.

The Morena and PT parties have 53% of the vote in the plenary.

Second factor

The announcement that the rating agency Fitch Ratings will stop providing securities rating services to Pemex as of March 4.

According to the statement, it is a decision by the oil company to optimize the contracting of services.

Although Pemex will comply with regulatory issues by continuing to receive the service of two rating agencies, removing one, which in turn has been the strongest, may affect the reputation of the oil company and raise the perception of risk.

Quotes and the peso

In the session, the euro touched a low of 1.1992 and a high of 1.2094 dollars per euro.

Finally, the euro peso touched a minimum of 24.8118 and a maximum of 25.0190 pesos per euro.

At the close, the interbank quotes for sale stood at 20.6114 pesos per dollar, 1.3956 dollars per pound and 1.2088 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE