The peso closed the session with an appreciation of 1.02% or 25.5 cents, trading around 24.72 pesos per dollar, gaining ground alongside most of the currencies in the basket of major crosses, correcting part of the losses of last week.

The performance of the peso was also in line with that observed in the capital market, as generalized gains were observed, given the expectation that the main countries affected by the coronavirus could begin to normalize their economic activity in the coming months.

The stability of the exchange rate during the session is likely due to greater caution prior to the release of relevant economic indicators during the week, particularly economic growth data from the United States and Mexico.

It should be added that the performance of the exchange rate was separated from the Brazilian real, which continued to lose ground during the session.

The real closed with a depreciation of 1.30%, reaching a maximum level of 5.7243 reais per dollar.

The depreciation of the real is due to the political crisis of the Bolsonaro administration, where the resignation of the economy minister is now feared in the face of pressure from the legislature to increase public spending in the short and medium term.

It cannot be ruled out that, in subsequent sessions, the Mexican peso will lose ground on a par with the Brazilian real, since sometimes the peso is used as a currency to speculate against other Latin American currencies.

The peso and the crude

Oil prices once again faced downward pressure, given the risk that storage space will run out in the coming months.

The WTI closed down 23.44%, trading at $ 12.97 per barrel. During the week, a sustained drop in oil prices could also create pressures against the currencies of commodity-producing countries.

Finally, in Mexico, the perception of risk is likely to rise due to uncertainty about public policy decisions.

This morning López Obrador said in his morning conference that he will review the Afores in Mexico once the contingency is over, saying that a rescue may be required.

This type of policy can generate nervousness in the market, since just last week a bill was presented proposing that the Afores pass into the control of the State.

Although the coordinator of the Morena bench indicated that the initiative was not viable, this type of initiative generates nervousness.

In Argentina, a similar change occurred in 2008, when pensions came under the control of the State, arguing that it sought to «reverse the neoliberal process of the 1990s.»

In the session, the exchange rate touched a minimum of 24.6910 pesos and a maximum of 25.0317 pesos. The euro-peso reached a minimum of 26.7318 and a maximum of 27.1295 pesos per euro in the interbank prices for sale. For its part, the euro touched a minimum of 1.0799 and a maximum of 1.0860 dollars per euro.

At the close, the interbank quotations for sale were located at 24.7170 pesos per dollar, 1.2425 dollars per pound and at 1.0826 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE