The Mexican peso ends the week at its best level since 2020

The Mexican peso closed this week at its best level in almost three years, ending this Friday at 18.77 units per US dollar, according to the Bank of Mexico (Banxico), the first time it has traded below 19 since 2020.

This is its best close since February 18, 2020, when it ended the day at 18.59, during the last week in which it traded below 19 units so far.

Despite the optimism of the Mexican government for this indicator, “the appreciation of the peso happens along with the weakening of the dollar”, opined Gabriela Siller, director of economic analysis at Banco Base, in an analysis shared with the media.

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“The dollar lost ground after the publication in USA from the University of Michigan consumer confidence, which rose from 59.7 points to 64.6 points. The combination of lower inflation and better economic expectations reduces the risk of a US recession.”said.

The exchange rate milestone comes after Mexico’s peso ended 2022 as the second of only four currencies to appreciate against the US dollar, alongside the Russian ruble, the Brazilian real and the Peruvian sol.

While the pound sterling, the euro and the pesos of Colombia and Chile reached historic lows during 2022, the Mexican currency ended the last day of the year at 19.50 units per US bill, according to the Bank of Mexico, an appreciation of 5% against at 20.53 of the first day.

Given the appreciation of the Mexican currency this week, President Andrés Manuel López Obrador presumed that “The peso is strengthened as it has not been seen in half a century.”

“It is due to the confidence that investors have in Mexico due to the possibilities that exist for investment, for companies,” he said at his press conference on Thursday.

The Citibanamex team of analysts recognized this Friday “a weakening of the dollar in the medium term, and therefore a strengthening of the emerging currencies”.

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But, like other specialists in the sector, he warned that the trend could be reversed.

“As the Federal Reserve (Fed) continues to increase interest rates and Banxico concludes the cycle of increases, we expect a slight depreciation of the peso,” concluded in an analysis sent to the press.

Source: EFE