The data consolidates the idea of a decrease in the rate of tightening of the Fed’s monetary policy.
The Mexican peso continued to extend its appreciation against the dollar this Thursday, staying below 19 units per greenback for the second consecutive day, helped by the inflation data for December in the United States, which fell for six consecutive months.
The local currency ended the session at 18.8476 pesos per dollar, an appreciation of 0.54% or 10.22 cents; it touched a maximum of 18.9816 units and a minimum of 18.8173 units, according to data from the Bank of Mexico (Banxico).
With the new minimum recorded yesterday, January 12, the peso has gained nine consecutive sessions gaining ground against the US currency, accumulating an appreciation of 3.22% or 66 cents at the beginning of the year.
“The inflation report from the United States contributed to the appreciation of the peso this Thursday, even the market had anticipated this good data that shows a significant drop in annual terms in the inflation rate (and if this trend continues) it will not It will be necessary to tighten the rate of interest rate hikes even more,” said James Salazar, deputy director of economic analysis at CI Banco.
In the United States, inflation in December stood at an annual rate of 6.5%, in line with market expectations, its lowest level since October 2021 when it stood at 6.2 percent.
With the December data, there are six consecutive months with falling inflation. The peak was 9.1% and was recorded in June.
CI Banco specialists stated, in a report, that “for investors, the inflation data for the United States consolidates another downward step in the rate of tightening of the Federal Reserve’s (Fed) monetary policy and speculation grows that a pause in restrictive monetary actions is near”.
extends strength
The strength of the Mexican currency that has extended in 2023 and that places it at its best level since February 2020, is also attributed to “the extraordinary entry of dollars into Mexico for exports, remittances, foreign direct investment, tourism and foreign investment in government securities, said Janneth Quiroz, deputy director of Analysis at Monex Casa de Bolsa.
Analysts from Monex and Banco Base explained that if the inflation data for the United States dropped in December, the peso could have one more stimulus to stay below the barrier of 19 units per dollar in the very short term or in the next 45 days.
However, on Thursday the peso slipped to second place as the most appreciated currency against the greenback among a sample of 20 world currencies.
The Brazilian real takes advantage and advances 3.66% in this 2023 against the dollar and in the third step is the Russian ruble, with an appreciation of 3.07 percent. The Norwegian krone, the Swiss franc and the Swedish krona are the weakest, reflecting an annual depreciation of 0.99, 0.38 and 0.03%, in that order.
For its part, the Dollar Index (DXY), which measures the US currency against a list of six strong currencies, fell 0.91% to 102.25 points. In these first days of January it falls 1.23%, according to data from Investing.
