After AMLO’s announcement on Banxico, the dollar surpasses the 22 peso barrier

The Mexican peso broke the barrier of 22 units by dollar according to Citibanamex data, after the president Andrés Manuel López Obrador propose to Victoria Rodriguez Ceja, undersecretary of tax authorities, to head the Bank of Mexico (Banxico).

The foregoing represents 30 cents higher than the close of the last day in the exchange rate, which thus places it at its highest level so far in 2021.

Base Bank noted in a statement that the announcement of Victoria Rodriguez to be the new governor of Banxico “It was a surprise for the market and generates uncertainty about the central bank’s monetary policy expectations.”

“In the short term, it will be key to know your position on inflationary pressures and if you consider that they are temporary or not, since your vote in the Governing Board will depend on this, if confirmed,” he said.

Another factor that puts pressure on the national currency is the publication of initial unemployment claims in the United States, which were at their lowest level since 1969, which supports the speculation of a less flexible monetary stance by the Federal Reserve .

The foregoing strengthened the dollar weighted index, which advances 0.36 percent and reaches a new maximum since July 24, 2020.

In recent sessions, the strengthening of the dollar has been driven by the expectation that the Federal Reserve could be more aggressive in the process of withdrawing its monetary stimuli, concluding the bond purchase program in the first half of 2022 and initiating a cycle of interest rate increases in the second half of the year, which contrasts with the position of central banks such as the European Central Bank and the Bank of Japan.

With information from López-Dóriga Digital

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker