The peso closed the session with a significant depreciation of 0.96% or 19.18 cents, trading around 20.15 pesos per dollar, with the exchange rate touching a minimum of 19.9292 and a maximum of 20.1851 pesos.

The daily depreciation of the peso was the highest since April 30 and occurred alongside a strengthening of the US dollar whose weighted index advanced 0.69%, something not seen since the end of April.

Likewise, the higher demand for dollars was due to the increase in interest rates on Treasury bonds in the secondary market, where the 10-year rate rose 6.3 basis points, reaching 1.68% and reaching a maximum of 1.6934%, not seen from April 13.

The upward movement of interest rates and the strengthening of the dollar occurred after 7:30 a.m., with the publication in the United States of April inflation, which stood at an annual rate of 4.2%, the highest since September 2008, significantly exceeding market expectations of 3.6 percent.

The peso

Core inflation, which serves as a better indicator of the long-term trend of inflation, was at an annual rate of 3.0%, registering its highest level since January 1996.

In its monthly comparison, the underlying component advanced 0.9%, its highest increase since April 1982.

The inflation data sends a signal to the market that the most recent inflationary pressures in the United States may not be transitory, as Federal Reserve officials have repeated, something that, if confirmed in the coming months, could force monetary policy makers to adopt a less flexible posture.

In the foreign exchange market, all currencies in the wide basket of main crosses lost ground against the dollar, the most depreciating being the Turkish lira (-1.76%), the New Zealand dollar (-1.59%), the Brazilian real (-1.61%). ), the Australian dollar (-1.46%) and the Swedish krona (-1.32 percent).

The Mexican peso was the 10th most depreciated currency during the session.

Speculation about a possible withdrawal of monetary stimulus in the United States also caused losses in the capital markets of the United States, with the Dow Jones losing 1.99%, the S&P 500 losing 2.14% and the Nasdaq 2.67 percent.

Latin America

Tomorrow will be relevant for the monetary policy of several Latin American countries.

In Mexico at 1:00 p.m. the announcement of Banco de México’s monetary policy will be announced, where it is anticipated that the interest rate will remain unchanged at 4.00%, due to the upward risks for inflation that were accentuated during April.

In Chile, at 5:00 p.m. central Mexico, the monetary policy announcement will be announced and the market anticipates that the rate will remain unchanged at 0.50 percent.

Finally, in Peru, the monetary policy decision will also be announced at 6:00 p.m. Central Mexico and the market anticipates that they will keep the reference rate unchanged at 0.25 percent.

It is worth mentioning that Chile and Peru do not face inflationary pressures as is being observed in Mexico and the United States.

In the session, the euro touched a minimum of 1.2066 and a maximum of 1.2152 dollars per euro. For its part, the euro peso touched a minimum of 24.1375 and a maximum of 24.3747 pesos per euro.

At the close, interbank prices for sale stood at 20.1520 pesos per dollar, 1.4056 dollars per pound and 1.2076 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE