The peso closed the session with an appreciation of 1.60% or 32.4 cents, trading around 19.92 pesos per dollar, the highest daily advance since September 9.

With this, the Mexican peso became the most appreciated currency in the wide basket of main crosses, followed by the South African rand which appreciated 0.98%, the pound sterling with 0.90% and the Russian ruble with 0.69%. The appreciation of the peso is due to two factors:

1. Risk perception regarding Mexico was reduced. This occurred after legislators from the Chamber of Deputies agreed to postpone the discussion and vote on the reform of the Bank of Mexico Law that seeks to force the Central Bank to be a buyer of dollars of last resort. For now, it is being stopped, but the risk that a reform that violates the autonomy of the Bank of Mexico is approved, which will be known until January 2021.
2. Risk appetite increased in global financial markets associated with the negotiation and probable approval of a fiscal stimulus package in the United States. According to the Republican leader of the Senate, Mitch McConnell, they will continue working until an agreement is reached. For now, the stimulus package to be approved is most likely worth around $ 750 billion. The optimism was reflected mainly in the capital markets of the United States, where the Dow Jones advanced 1.13% and the S&P 500 gained 1.29 percent.

The peso

In Wednesday’s session, the markets will focus on the Federal Reserve’s monetary policy announcement scheduled for 1:00 p.m., where they are expected to keep the interest rate unchanged. However, the publication of the economic projections of the Open Market Operations Committee will be key, which include expectations of growth, inflation and the interest rate, which is used to speculate on the future of the United States’ monetary policy.

Indicators of Banxico

In the session, the exchange rate touched a minimum of 19.8944 and a maximum of 20.2611 pesos, the euro touched a minimum of 1.2122 and a maximum of 1.2169 dollars per euro. Finally, the euro peso touched a minimum of 24.1816 and a maximum of 24.6172 pesos per euro.

At the close, the interbank quotes for sale stood at 19.9180 pesos per dollar, 1.3451 dollars per pound and 1.2160 dollars per euro.

Gabriela Siller; PhD

Director of Economic-Financial Analysis.

Banco BASE