AMLO’s comments and slowdown in inflation depreciate the peso 2%
dollar exchange rate today
The exchange rate closed at 18.9762 pesos per dollar this Monday, a fall of 2.51% compared to the closing price on Friday. The peso had its biggest depreciation against the dollar since June 2020, amid global uncertainty caused by the fall of Silicon Valley Bank, the biggest bank failure since the 2008 crisis.
The peso had reached its best level in almost 5 years, on March 8, and had shown one of the best performances against the dollar among the main global currencies during the year. However, at the close of Friday, the Mexican currency presented a weekly depreciation of 3.0%, which is the largest since the beginning of March of last year.
“There is uncertainty related to the position that the Federal Reserve will take with respect to the bankruptcies of SVB and Signature Bank. This has been the Fed’s fastest hike cycle and now they must face risks of a macroprudential nature, which fuels positions of aversion to risk,” said Victor Gomez, an economics professor at ITAM.
In the event of a crisis, the dollar would reach 20.30 pesos
At a technical level, “the possibility of a trend change for the exchange rate is increasing. For now, we can only speak of an overreaction,” said an analysis by Banco Base. However, he added that “if risk aversion in global financial markets continues, the exchange rate would rise towards the level of 19.50 pesos per dollar and in the unlikely event of a crisis it would rise to 20.30 pesos.”
With information from Reuters