The Mexican peso closed the day on Tuesday with a depreciation of 0.43% or 7.6 cents, trading around 17.97 pesos per dollar, with the exchange rate oscillating between 17.86 and 17.99 pesos per dollar. With this, there are six sessions that the Mexican currency presents losses, falling 3.10% against the greenback.
Gabriela Siller, director of economic analysis at Banco Base, points out that the last time the peso had losses for six consecutive sessions was in November 2021, when the dollar strengthened after the ratification of a second term of Jerome Powell in the US Fedand when here in Mexico the president of the republic withdrew the nomination of Arturo Herrera as governor of the Bank of Mexico and surprisingly announced Victoria Rodríguez Ceja, current governor.
The specialist added that the current depreciation of the peso is due to external and internal factors.
The external factors are:
- Greater risk aversion due to the stagnation in the negotiations to raise the debt ceiling in the United States.
- The publication of negative indicators for manufacturing in Europe and the United States that point to a contraction in production in May.
- Speculation that the Federal Reserve will raise interest rates again on June 14.
And the internal factors are:
- Less legal certainty due to recent actions by the federal administration that call into question the safety of investing in the country, such as the case of the occupation of a Grupo México railway concession.
- The expectation that the Bank of Mexico will no longer raise interest rates, while the Federal Reserve could continue raising it, reducing the rate differential between Mexico and the United States and reducing the attractiveness of maintaining investments in Mexican pesos.
On the other hand, Wall Street closed this Tuesday in red, and the Dow Jones Industrials, its main indicator, fell 0.69%, with the two main parties in Congress still immersed in talks about the sovereign debt ceiling in the US. between crossed accusations of irresponsibility.
At the close of operations, the Dow Jones fell to 33,055.51 units and the selective S&P 500 lost 1.12% to 4,145 points.
For its part, the composite index of the Nasdaq market, in which the main technology companies are listed, dropped 1.26%, to 12,560 integers.
“We are really at a crossroads in this negotiation, but President (Joe) Biden has not taken this issue seriously.“, criticized the “number two” of the Republicans in the Lower House, Steve Scalise, at a press conference.
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