The peso closed the session with an appreciation of 1.09% or 22.4 cents, trading around 20.39 pesos per dollar, with the exchange rate touching a minimum of 20.3126 and a maximum of 20.8139 pesos per dollar.

The appreciation of the peso was concentrated in the minutes after 12:00 hours, after the announcement of monetary policy by the Federal Reserve, where it was reiterated that a broadly flexible stance will continue to be implemented despite the fact that economic growth expectations and inflation have improved in the first months of the year.

Later, Fed Chairman Jerome Powell told a press conference that the economy is far from its maximum employment and inflation targets, adding that it is not the time to start thinking about the withdrawal of monetary stimulus.

Regarding the economic projections for the United States, the committee (FOMC) adjusted its estimate of real GDP upwards, expecting a growth of 6.5% in 2021, from the previous projection (December) of a growth of 4.2 percent.

Likewise, the committee considers for the most part that the interest rate will remain at minimum levels at least until 2023.

Regarding monetary policy, the Fed decided to keep the interest rate unchanged in a range between 0.00 and 0.25%.
The Fed will continue to increase its holdings of Treasury securities by at least $ 80 billion a month and mortgage-backed securities by $ 40 billion a month, until substantial progress has been made towards employment and inflation targets.

The peso 

In the foreign exchange market, the weighted index of the dollar closed with a fall of 0.48%, being the highest since Thursday of last week, erasing the advance of 0.25% that was observed in the hours prior to the announcement of the monetary policy of the Reserve Federal.

In the wide basket of main crosses, the Mexican peso was the second most appreciated currency, behind the South African rand that advanced 1.59% and followed by the Hungarian forint with 0.92%, the Norwegian krone with 0.88% and the Czech crown with 0.83 percent.

It should be added that little relevant economic information was published in the session, so that the movements of the foreign exchange market and other financial markets were mainly determined by the Fed’s monetary policy announcement.

In the session, the euro touched a low of 1.1886 and a high of 1.1985 dollars per euro. Finally, the euro peso touched a minimum of 24.3342 and a maximum of 24.7577 pesos per euro.

At the close, the interbank quotes for sale stood at 20.3920 pesos per dollar, 1.3967 dollars per pound and 1.1981 dollars per euro.

Gabriela Siller; PhD
Director of Economic-Financial Analysis.
Banco BASE