The peso closed the session with a moderate appreciation of 0.16% or 3.3 cents, trading around 20.06 pesos per dollar, with the exchange rate touching a minimum of 20.0124 and a maximum of 20.1300 pesos per dollar, that is, a variation interval of 11.7 cents.
Since February 2020, there have only been seven sessions with minor variations in the exchange rate between the minimum and the maximum: three of these days were non-business days and one was on December 31, 2020, when liquidity tends to fall significantly .
So far in April, exchange rate volatility stands at 6.36% and if the month ended today, it would be the lowest monthly volatility since December 2019.
The low volatility is due to the fact that, in general, optimism continues to be observed in global financial markets and that the global economic outlook is positive, which contributes to reducing speculation against the currencies of emerging economies such as the Mexican peso.
Likewise, there is caution, due to the risk that inflationary pressures will be observed in the United States that will force a less flexible monetary stance on the part of the Federal Reserve.
This caution means that participants are waiting for relevant economic information that allows adjustments to inflation expectations and interest rates.
The peso
During the session, Fed Chairman Jerome Powell pointed out in a virtual conference of the Economic Club of Washington that before considering increases in interest rates, the Federal Reserve will first begin to reduce the pace of bond purchases.
Powell also reiterated the expectation that the US economy will recover at a faster rate as the Covid19 pandemic is overcome and job creation reactivates.
Powell’s comments had no clear effect on the foreign exchange market or other financial markets.
It is important to mention that the minimum of the exchange rate during the session, of 20.0124 pesos per dollar, occurred alongside a strong increase in the price of oil.
The WTI closed with an increase of 4.54%, trading at 62.91 dollars per barrel due to the fact that the International Energy Agency raised its estimates of demand growth during 2021 by 230 thousand barrels to 96.7 million barrels per day.
Likewise, the weekly report from the United States Energy Information Administration showed that implicit demand for oil rose by just over a million barrels a day to 20.33 million barrels.
Hydrocarbons Law
On the other hand, in Mexico, today the Energy Commission of the Chamber of Deputies approved with 22 votes in favor and 10 against the opinion on the reform of the Hydrocarbons Law proposed by the President without substantial changes.
Today in the afternoon, the opinion will be submitted for discussion and subsequent vote in the plenary session of the Chamber of Deputies, where it is also expected to be approved without changes.
This opinion, among other things, aims to empower the energy authorities, mainly the Ministry of Energy and the Energy Regulatory Commission, to suspend fuel distribution, import, marketing and storage permits for national security reasons.
If approved, they would be introducing more elements of uncertainty to the hydrocarbon market in Mexico, which is already the subject of several controversies derived from the current government’s energy policy.
Once approved in the Chamber of Deputies, the reform bill will be turned over to the Senate for discussion and very likely approval.
Legislators have until April 30 to approve it, the date on which the regular session period ends.
In the session, the euro touched a minimum of 1.1947 and a maximum of 1.1987 dollars per euro. Finally, the euro peso touched a minimum of 23.9566 and a maximum of 24.0775 pesos per euro.
At the close, interbank quotes for sale stood at 20.0620 pesos per dollar, 1.3779 dollars per pound and 1.1980 dollars per euro.
Gabriela Siller; PhD
Director of Economic-Financial Analysis.
Banco BASE
