2024-08-05 21:59:40
The fear of a recession in USA was reflected in the fall of the Mexican peso; This is what we know about a possible crisis in the American power and its effects in Mexico on the so-called “Black Monday” today, August 5..
Not only did the Mexican peso suffer a drop of 3 pesos and 20 cents, leaving the exchange rate at 20.16 units per dollar, as Asian stock indices are affected today, Monday, August 5; Japan’s Nikkei 225 benchmark index plummeted 12.4%, and closed with losses of 4,451.28 points, at 31,458.42.
Fears of a recession in the United States were also reflected in losses for computer chip makers such as Samsung Electronics, as South Korea’s Kospi index fell 9.3% on Monday, while Samsung shares lost 11.6%.
Added to this, Taiwan’s Taiex index plunged 8.4% and Taiwan Semiconductor Manufacturing Co., the world’s largest chipmaker, lost 9.8%, in addition to The Shanghai Composite Index fell 1.54% and the Shenzhen Composite Index fell 1.85%.
“To put it mildly, the volatility spike is a spectacle that underlines just how nervous the markets have become (…) Now the real question is: can the typical market reflex of selling the volatility or buying the market dip prevail over the deep-rooted anxiety brought on by this sudden and sharp fear of recession?”
Stephen Innes, de SPI Asset Management
Unemployment rate in the United States rises, raising fears of a recession
He fear of a recession in the United States was generated after a report on the unemployment rate in that country, as explained to AP by the SPI Asset Management analyst Stephen Innes said the index rose more than expected to 4.3% in July.
The report had an impact on the euro Well, the currency fell to $1.0896, from $1.0923while el Bitcoinwhich had recently touched $70,000, fell 14% to $54,155.00.
In that sense, this was the Reaction on Europe’s major stock exchangeswhich followed the declines recorded in Asia:
- Frankfurt lost more than 3%
- Paris fell 2.6%
- London 2.3%
- Madrid lost 2.8%
- Milan plummeted by 4%
Apart from the above, the price of crude oil hardly changed; U.S. benchmark crude gained 9 cents to $73.61 a barrel, while Brent held at $76.81 a barrel.
Possible recession in the United States affects exchange rate in Mexico
The possibility of a US recessionas well as other related factors, had effects on the exchange rate in Mexico, since The peso reached 20.16 units per dollar today, Monday, August 5, its highest level since October 2022.
According to Gabriela Siller, director of economic analysis of the financial group Banco Base, the Weight loss is related to 3 factors:
- The possibility of a US recession in the short term
- The expectation that the Bank of Japan will continue to raise its interest rate
- A growing risk aversion regarding Mexico
“From the year’s low to today’s high, the exchange rate has risen by 3 pesos and 20 cents. In contrast, the Japanese yen is dragging down the peso.”
Gabriela Siller
2024-08-05 21:59:40