The peso closed the session with a depreciation of 0.52% or 10.3 cents, trading around 19.95 pesos per dollar, with the exchange rate touching a minimum of 19.7962 and a maximum of 19.9772 pesos.

The performance of the exchange rate during the session is divided into two parts.

First part

During the morning, the peso appreciated to a level of 19.7962 pesos and temporarily ranked as the most appreciated currency of the session, after, in his morning conference, the president of Mexico said that inflation should be taken care of and that Banco de México has carried out an adequate policy.

It should be remembered that monetary policy is the responsibility of Banco de México , which is autonomous from the Federal Government.

However, the president’s comments strengthen speculation that the Governing Board will be prudent.

Yesterday, Deputy Governor Irene Espinosa said in an interview that a more flexible monetary stance is ruled out, which contributes to the expectation that Banco de México will leave its target rate at 4% in the coming months.

Second part

In the afternoon, after 1:00 p.m., the Federal Reserve’s monetary policy minutes mentioned that some officials indicated that, if accelerated progress towards the Committee’s objectives (of full employment and average inflation of 2%) continues, it may be appropriate at subsequent meetings to begin discussing a plan to reduce the pace of asset purchases.

It should be remembered that this meeting was held on April 28, before inflation for the same month was published at 4.2%, considerably above expectations. This fuels speculation that the Fed is already considering the right time to begin withdrawing its monetary stimulus.

After the publication of the minutes, the exchange rate reached a maximum in the session of 19.9772 pesos per dollar.

Peso

The dollar weighted index closed with an advance of 0.49%, after losing during four consecutive sessions.

Likewise, the most depreciated currencies were the Norwegian krone (-1.17%), the New Zealand dollar (-1.15%), the Brazilian real (-1.04%) and the Australian dollar (-0.90%), all currencies of countries with a relevant production of raw Materials.

The strengthening of the dollar contributed to the weakness in the prices of several raw materials such as aluminum (-2.54%) and copper (-3.82%). Among energy, WTI lost 3.33%, trading at 63.31 dollars per barrel.

The WTI also lost due to the expectation of a greater supply of crude before the possibility of the nuclear agreement between Iran and the United States being restored.

Today, Iran’s deputy foreign minister said talks are progressing.

In the session the euro touched a minimum of 1.2160 and a maximum of 1.2245 dollars per euro. For its part, the euro peso touched a minimum of 24.1813 and a maximum of 24.3609 pesos per euro.

At the close, the interbank quotes for sale stood at 19.9480 pesos per dollar, 1.4124 dollars per pound and 1.2177 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE