The Mexican peso closed the week with a depreciation of 0.85% or 17 cents, trading around 20.21 pesos per dollar, after the dollar strengthened due to the rate hike made by the Federal Reserve (Fed) on Wednesday and before the expectation of more increases to control inflation.
“The depreciation of the peso was concentrated in the session on Friday and was due to a strengthening of the US dollar due to an increase in risk aversion in the financial markets. In the week, andThe weighted index of the dollar closed with an advance of 2.53%the highest since the third week of March 2020,” Gabriela Siller, director of economic analysis at Banco Base, commented in a report.
The most depreciated currencies were the pound sterling with 4.80%, the Swedish krona with 4.78%, the Chilean peso with 4.78%, the New Zealand dollar with 4.04%, the Polish zloty with 4.02%, the Norwegian krone with 3.90%, the Czech koruna with 3.59% and the Hungarian forint with 3.56%, added Siller Pagaza.
According to the Fed’s outlook, this will continue to raise the interest rate up to 4.5% at the end of the year and they could continue raising it up to 5.0% in 2023.
Adding to the US central bank’s stance, the dollar strengthened on fears of an economic downturn and geopolitical tensions rose after Russia ordered 300,000 reserves shipped to Ukraine and organized a four-region annexation referendum, sending the signal that the war will not end soon.
Secondly, the main indices posted losses in the capital market, with the S&P 500 losing 4.65% on the week and the Nasdaq losing 5.07%. With this decline, the indices were close to their minimum levels for the year observed in June and it is not ruled out that the losses could continue in the coming weeks.
For its part, the euro peso touched a maximum of 20.1486 and a minimum of 19.5278 pesos per euro.
MORE NEWS:
High level Team of young journalists whose objective is to explain the most relevant business, economy and finance news. We are passionate about telling stories and believe in citizen and service journalism.