2024-08-05 01:11:47
The Mexican coin The week started amidst nervousness in the financial marketspending Wednesday’s decision of the Federal Reserve US on whether or not to cut interest rates.
In addition, the employment indicator in EU which will be announced this week also caused noise at the level of the exchange rate, which yesterday reached a depreciation of up to 1.49% and a level of 18.73 units per green currency.
Financial analysts agree that the peso is heading towards 19 pesos per dollar towards the second half of the year due to geopolitical factors such as the arrival of Claudia Sheinbaum to power and election in the United States.
Yesterday, the peso was quoted at around 18.64 units per dollar with an exchange rate touching a minimum of 18.41 and a maximum of 18.72, which means that five consecutive sessions of losses were reached and a fall of 3.88% has accumulated this week.
Janneth Quiroz, director of financial analysis at monex, He explained that this is a more systemic than local adjustment, since all currencies are on the decline while waiting to see if the interest rate will be cut in USA.
He added that uncertainty also persists in the markets and there could be moments of volatility as the review of the Plan C in Mexico.
Quiroz Zamora He commented that geopolitical factors could move currencies in the coming weeks, as there is currently evidence of risk aversion due to a possible attack by Turkey on Israel and an escalation of the war in the Middle East.
In this regard, an analysis of Paulina Anciola, Citibanamex financial analyst noted that recent information on inflation and unemployment has strengthened expectations that the Fed will cut rates until September.
He recalled that inflation in the US is close to the 2% target (reaching 2.5% in June) with a downward trend. On the other hand, he specified that the unemployment rate increased to 4.1% in June, a maximum since November 2021.
“In this sense, the unemployment rate would be about to cross the threshold of the Sahm Rule, which considers that when the three-month average of the unemployment rate is more than 0.5 percentage points above the minimum of the last 12 months, it is likely that the economy is in the first months of a recession.”
He said that lays the groundwork for the Federal Reserve start cutting its rate soon. Although no changes are expected in the Federal Funds Rate for this Wednesday’s meeting, implicit expectations in market instruments estimate a 25 basis point cut with 88% probability for September.
Greater volatility is expected this week awaiting Fed Chairman Jerome Powell’s message and the tone of his statement.
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2024-08-05 01:11:47