The peso closed the session with an appreciation of 1.33% or 27.8 cents, trading around 20.66 pesos per dollar, with the exchange rate touching a minimum of 20.5776 and a maximum of 20.9606 pesos.

The Mexican peso was the most appreciated currency in the exchange market, followed by the Russian ruble, which advanced 0.57% and the pound sterling, which appreciated 0.36%, while the rest of the currencies in the wide basket of main crosses lost ground against the dollar.

Meanwhile, the dollar weighted index closed 0.11% higher, gaining ground for the third consecutive session, partly as a result of a greater perception of risk associated with global growth in daily cases of coronavirus, a trend that is also being observed in the United States.

In the session, the Global Risk Perception Base Indicator (PPI) stood at 123 points, which means perception by medium risk.

Within the indicator, the commodities component was consistent with a higher perception of risk, while the money market, foreign exchange, capital and country risk components showed mixed results.

The appreciation of the peso in Mexico is divided into two parts.

The peso

During the first part of the session, the peso appreciated in anticipation of the monetary policy announcement.

This is due to the fact that the market discounted the possibility that the interest rate would remain unchanged after the inflation data for the first half of March was published yesterday, which surprised to the upside by standing at 4.12% per year.

The second downward movement of the exchange rate occurred at 1:00 p.m., after it was announced that the rate remained at 4.00%, which took the exchange rate to a minimum in the session of 20.5776 pesos per dollar.

Banco de México‘s statement was perceived as less accommodative, raising the probability that the interest rate will remain unchanged at 4% for the rest of the year.

It is worth mentioning that the decision to maintain the rate was unanimous, which contributes to the expectation of a more cautious stance on the part of the Governing Board, in the context of inflationary pressures and greater volatility in international financial markets.

In the session, the euro touched a minimum of 1.1762 and a maximum of 1.1828 dollars per euro. Finally, the euro peso touched a minimum of 24.2327 and a maximum of 24.7462 pesos per euro.

At the close, the interbank quotes for sale stood at 20.6590 pesos per dollar, 1.3735 dollars per pound and 1.1765 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE