The peso closed the session with a moderate depreciation of 0.13% or 2.6 cents, trading around 19.97 pesos per dollar, with the exchange rate touching a minimum of 19.8273 and a maximum of 20.0018 pesos.

The depreciation occurred in tandem with a recovery in the US dollar, which erased the morning’s losses to close unchanged on the weighted index.

Likewise, the dollar erased its losses as the market’s attention is focused on the inflation data for the United States for the month of April, which is published tomorrow at 7:30 a.m., where annual inflation is likely to be around 3.7% , level not seen since September 2011.

If inflation data is published above the estimate, the dollar could strengthen during the session on Wednesday.

It is worth mentioning that the dollar weighted index accumulated a 1.20% decline between Wednesday of last week and yesterday Monday, so the market is also prone to an upward correction in the exchange rate in Mexico in the short term.

During the session, Federal Reserve officials reiterated the importance of maintaining a flexible monetary stance.

Fed Governor Lael Brainard said that despite the positive economic outlook, they are still far from inflation and employment targets, adding that even if inflation exceeds the average 2% target, they have the tools to gradually bring inflation down to the desired level.

Mexican peso

The president of the St. Louis Fed said that it is not yet time to adopt a less flexible stance, referring to the bond purchase program.

Minneapolis Fed Chairman Neel Kashkari said in the same vein that the economy is still a long way from the full employment target.

In the session, the Global Risk Perception Base Indicator (PPI) stood at -41 units, very close to its threshold of 0 units, which means that the market did not decide between perception and risk appetite.

Within the indicator, the commodities market component was consistent with a greater appetite for risk, while the capital component was consistent with a greater perception of risk.

Finally, the components of the foreign exchange market and risk showed mixed results.

In the foreign exchange market, the most appreciated currencies in the session were the Colombian peso with 0.85%, the Polish zloty with 0.63%, the Peruvian sol with 0.47% and the Czech crown with 0.41 percent.

On the contrary, the most depreciated currencies were the Chilean peso with 1.16%, the Israeli shekel with 0.89% and the South Korean won with 0.53%. It should be noted that the depreciation of the Israeli shekel is due to the crisis between Israel and Palestine, which has led to military attacks from both sides and they have reiterated that retaliation will continue.

In the session, the euro touched a minimum of 1.2123 and a maximum of 1.2182 dollars per euro. For its part, the euro peso touched a minimum of 24,1265 and a maximum of 24,3048 pesos per euro.

At the close, the interbank quotes for sale stood at 19.9709 pesos per dollar, 1.4140 dollars per pound and 1.2147 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE