The Mexican peso closed the session on Wednesday with an appreciation of 0.43% or 7.8% cents, trading around 17.90 pesos per dollarwith the exchange rate touching a maximum of 17.99 and a minimum of 17.83 level not seen since September 25, 2017.
Gabriela Siller, director of economic analysis at Banco Base, said that the appreciation of the Mexican currency was the result of a weakening of the dollar, which fell 0.44% in the weighted index. The losses of the US currency deepened after the US Federal Reserve (Fed) announced a 25 basis point increase in interest ratesleaving them in a range between 5.00% and 5.25%.
In a press conference, Jerome Powell mentioned that today the decision to pause the increases to the rate was not made and that this decision will be made in June. “It is important to mention that the market does not estimate additional increases in the interest rate on June 14,” added Siller Pagaza.
Most of the currencies gained ground against the dollar, being the most appreciated today: the Russian ruble with 2.36%, the Brazilian real with 1.16%, the Japanese yen with 1.11%, the South African rand with 1.08%, the Czech crown with 0.90 % and the Swiss franc with 0.87%.
The director of Banco Base remarked that, despite the appreciation of the peso in the short term, upward pressure on the exchange rate cannot be ruled outsomething that could happen in the face of new episodes of risk aversion.
“The main risk factor during May is the negotiations in the United States Congress where it will be decided whether to eliminate or raise the debt ceiling. It should be remembered that, at the beginning of the week, the Secretary of the Treasury, Janet Yellen, mentioned that The United States could have problems meeting its debt obligations as of June 1.”
On the other hand, Wall Street closed this Wednesday in red, and the Dow Jones Industrials, its main indicator, fell 0.80%, after the Federal Reserve (Fed) announced a 25 basis point rise in interest rates, as planned, and hinted that it could stop the rate hike at its next meeting.
At the close of operations, the Dow Jones fell to 33,414 units and the selective S&P 500 subtracted 0.70% to 4,090 points.
For its part, the composite index of the Nasdaq market, in which the main technology companies are listed, fell 0.46% to 12,025 integers.
This time around, investors focused more on what the central bank didn’t say in its statement after two days of meeting than on what it did say, as the Fed appears to have softened its language on future rate hikes by removing the line from the March statement that read: “The committee anticipates that further tightening of the policy may be appropriate.“.
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