He mexican peso had its best start in the last seven six-year termsdriven by the President’s speech Claudia Sheinbaum Pardo and optimism about the health of the United States economy, analysts explained.
The Mexican currency ended the week at 19.27 units per dollar and accumulated an appreciation of 2.1% or 40 cents in the first four days of the new administration, according to the wholesale operations presented Bloomberg.
This is the largest gain in a start of government since the times of former president José López Portillo, when the parity strengthened 8.5% in the similar period. The peso appreciated strongly starting October 1, after the inauguration of the first President of Mexico. In his speech, Sheinbaum Pardo commented that the autonomy of the Bank of Mexico, a responsible fiscal policy and a “reasonable” proportion between debt and Gross Domestic Product (GDP) will be maintained.
He assured that he will promote public and private investment, and that the investments of “national and foreign shareholders will be safe”, at the same time that the Treaty between Mexico, the United States and Canada (T-MEC) will be taken advantage of to promote the relocation of companies, the so-called “nearshoring”.
For Gabriela Siller, chief economist at Banco Base, The market is giving Sheinbaum Pardo the benefit of the doubtsince until now there have been no policies that cause controversy, although there is latent concern about the 2025 Economic Package, due to the cuts that will have to be made to public spending to reduce the deficit.
In his opinion, another factor that contributed to the appreciation of the peso was positive labor indicators in the United States that were published during the week, being higher than expected, which favors Mexico due to the close relationship between both countries.
The rise in oil also strengthened the national currency, since US crude oil, the reference for the Mexican mix, closed the week at 74.4 dollars per barrel and represented a gain of 9.1%, the largest increase in said period since March 31 last year, due to the risk of escalation in the Middle East conflict.
During the week, the peso was at the top of the exchange ranking, adding a gain of 2.2% against the dollar; followed by the Colombian peso, with an advance of just 0.2%.
The publication of positive economic indicators brought losses for the rest of the currencies, amid speculation that the United States Federal Reserve will be more cautious in cutting interest rates in the coming months.
The retail dollar ended this Friday at 19.73 pesos on sale at the windows of CitiBanamex branches, 46 cents below last week’s close.
The outlook for the exchange rate continues to be difficult given the attempts to stop judicial reform, analysts agreed.
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Of the dollar: The price of the dollar for today, October 4
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