The Mexican peso closed the day on Thursday with a fall of 2.12% or 38.2 cents, trading around 18.36 units per dollar, being the most depreciated currency during the day in the main crosses.
The exchange rate reached a maximum of $18.44 to a minimum of 17.89 pesos per green bill. Gabriela Siller, director of economic analysis at Banco Base, indicated that the loss of the Mexican currency is due to the following factors:
- An upward correction after the exchange rate hit a minimum not seen since September 26, 2017 in the morning.
- Inflation in February in Mexico was 7.62% annual, below market expectations, generating expectations that Banxico will be less aggressive in raising interest rates.
- The comments of the President of Mexico, Andrés Manuel López Obrador, who pointed out that the Republican Party’s proposal to use the US military to combat criminal organizations in Mexico is a lack of respect for sovereignty and that, if he does not change his attitude, he will make a call not to vote for that party.
“López Obrador’s comments generate a greater perception of risk about Mexico, since they could cause a deterioration in relations with the United States and represents a risk for the economic growth of the country”, added Siller Pagaza. - The president of the United States, Joe Biden, presented the proposed budget of 6.9 trillion dollars, which is believed to be rejected by the Republicans in the House of Representatives, since the party has said that they seek a cut of 150 billion dollars. dollars in spending and refuse to raise taxes.
- High risk aversion reflected by the collapse of the bank Silvergate Capital Corp. This bank, which operates from Silicon Valley, was forced to liquidate its assets due to the collapse of the cryptocurrency market.
On Wall Street, the S&P 500 lost 1.85% and the NASDAQ Composite fell 2.05%, but the financial sector of the S&P 500, which represents 11.5% of the index, lost 4.10%. The most affected subsector was regional banks (-9.35%), as it is feared that these are the ones with the greatest exposure to this type of risk. SVB Financial Group, a bank similar to Silvergate, lost 60.14%.
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