Sunday , March 7 2021

The peso loses ground against the dollar against the fall of oil

MEXICO CITY (APR) .- Peso lost ground again against the dollar, affected by the fall in international oil prices. In the banks' shops, the green ticket was offered at 20.77 points. while at the interbank level it was 20.42 pesos, or 1.62% more expensive than last Monday's closing, according to data from the Bank of Mexico (Banxico).

Today, the price of the West Texas Intermediate (WTI) dropped 6.71%, closing at $ 53.36 a barrel, losing nearly 30% from its peak in October due to the market perception that production decline Oil Organization The oil exporting countries (OPEC) will not be enough to avoid oversupply in the coming months.

In this context, the Base Bank analysis explained that most of the currencies in the basket of the main crosses of the dollar were offset by losses, especially those in the countries producing raw materials and oil.

The Norwegian crown closed down 1.27%, the Canadian dollar lost 1.04% and the Australian dollar lost 1.03%.

According to the analysis, the devaluation of the pesos during the early hours of the day was due to a combination of factors: "notably uncertainty about how decisions will be taken in the next federal administration, which raises questions about future health of public finances. "

"It should be noted that the Mexican peso managed to erase most of its losses after revealing that Banxico Deputy Governor Javier Guzmán said it may be necessary to raise the benchmark interest rate in the short term," the base bank said.

The deputy governor added that the balance of inflation risks remains upward and has worsened because of the devaluation of the peso, the likelihood of upward disruptions in energy prices, potential wage pressures and the risk of a "breakdown" of inflationary expectations.

This increases the likelihood that the Governing Council will raise its interest rate on 20 December and, for the moment, contributes to exchange rate stability.

While this is the case, capital aversion has returned on Tuesday, with the Mexican Stock Exchange's IPC losing 1.23% or 521.9 points, while the S & P 500 in the United States had a 1.82% offset. .

"At the next meetings, the uncertainty about the future of US-China trade relations could continue to negatively affect global capital markets," the base bank warned.

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