Peso threads its sixth fall after data on GDP contraction

The Mexican peso depreciated on Thursday for the sixth consecutive session after being disclosed earlier than the local economy contracted in the third trimester more than expected, while the nomination was still echoing on the eve of who will lead the Governing Board of the Bank of Mexico.

The local currency was trading at 21.5063 per dollar, down 0.45% compared to 21.4090 in the Reuters reference price on Wednesday.

The Economy of mexico It contracted between July and September by 0.4%, more than what was preliminarily estimated and what the market expected, in its first fall since its recovery from the pandemic, hit by the third wave of Covid-19 and bottlenecks in supply chains.

The peso fell on Wednesday to its weakest level since March 8 due to a rise in the dollar and after confirming that the president Andrés Manuel López Obrador withdrew his nomination from the former Secretary of the Treasury Arturo Herrera to head Banxico. The president said that he would propose for the post to the Undersecretary of Finance, Victoria Rodriguez.

The news caused nervousness in the markets, which have operated cautiously. Rodríguez claimed to be committed to fighting inflation, respecting the autonomy of the monetary entity and not touching international reserves.

“Of particular importance is that the autonomy of the central bank persists both in its operation and in the perception of market participants,” he said. Citibanamex in a report.

On Thursday the financial markets in the United States will remain closed due to the Thanksgiving DayTherefore, a significant drop in liquidity is expected in most markets.

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