The peso starts the session with an appreciation of 0.22% or 4.4 cents, trading around 19.88 pesos per dollar, with the exchange rate touching a maximum of 19.9772 and a minimum of 19.7197 pesos.

This is the result of a correction of most currencies against the dollar, whose weighted index shows a 0.17 percent decline.

It should be remembered that yesterday, the dollar index advanced about 0.50% because the Federal Reserve’s monetary policy minutes indicated that several members of the committee are considering the possibility of discussing a cut to the bond purchase program in the coming months. .

The minutes also indicated that price pressures associated with input shortages and supply chain bottlenecks may not be transitory, extending into the following year.

Because of this, further episodes of dollar strength cannot be ruled out.

The mexican peso

Little relevant economic information is published today, so the performance of financial markets is mixed and mostly a correction to yesterday’s movements.

In the capital market, the main indices in Europe advance an average of 0.70%, while in the bond market, the 10-year Treasury bond rate shows a decline of 1 basis point, after rising 3.4 basis points in Wednesday.

An exception is the commodity market, where the price of WTI oil loses 1.22% accumulating three sessions down and trading at 62.59 dollars, after the president of Iran, Hassan Rouhani, indicated that the elimination has already been agreed. sanctions against Iran, which will allow the country’s crude exports to resume.

According to Rouhani, details are still being discussed before the new nuclear deal is unveiled.

Laboral sector

Regarding economic indicators, in the United States the weekly employment report showed that initial requests for unemployment support decreased by 34 thousand compared to the previous week, reaching 444 thousand units, slightly below the market’s expectation of 450 thousand and falling for the third consecutive week.

On the other hand, continuous applications for unemployment support increased from 3.64 to 3.75 million people.

It should be added that yesterday afternoon the rating agency Standard & Poor’s cut the credit rating of Colombia‘s sovereign debt below investment grade, to be placed at BB +.

According to the rating agency, the rating adjustment is due to the failure to achieve a tax reform in Congress, which reduces the probability that the country will improve its deteriorated fiscal position.

The reaction of the Colombian peso can be seen from 8:00 am.

Other currencies

During the session, the exchange rate is expected to trade between 19.80 and 20.02 pesos per dollar.

The euro starts the session with an appreciation of 0.23%, trading at 1.2203 dollars per euro, while the pound advances 0.09% and is trading at 1.4128 dollars per pound.

Money market and debt

In the United States, the yield on the 10-year Treasury bonds decreased by 1.5 basis points, to 1.66%, while in Mexico the yield on the 10-year M bonds remained unchanged, at a rate of 6.90 percent.

Derivatives market and the peso

To hedge against a depreciation of the peso beyond 20.00 pesos per dollar, a purchase option (call), with an exercise date within 1 month has a premium of 1.83% and represents the right but not the obligation to buy dollars in the aforementioned level.

On the other hand, the interbank forward for sale is at 19.9504 at 1 month, 20.3155 at 6 months and 20.8143 pesos per dollar at one year.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE