The main drivers of appreciation of the national currency were the weakness of the dollar in the international market and the expectation of a more conciliatory position of the Trump administration against NAFTA.
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The Peso exchange rate against the Dollar was sold on Monday at 19.15 pesos at the bank window, at its lowest level since December 5. The main drivers of this movement were the weakness of the dollar in the international market and the expectation of a more conciliatory position of the Donald Trump Administration regarding the negotiations of the North American Free Trade Agreement (NAFTA).
“The appreciation of the peso was in line with a general strengthening of currencies against the US dollar, because market participants anticipated that the European Central Bank and the Bank of Japan could adopt a more restrictive monetary stance in the year,” said Gabriela Siller, responsible for Analysis in Base Bank.
The interbank dollar closed yesterday at 18,858 units, its lowest level in six weeks, according to information from the Bank of Mexico. During the day, the peso gained 14.70 cents, equivalent to 0.77 percent.
In the bank window, the greenback was at 19.15 units, lower than the 19.30 units on Friday at Citibanamex.
The national currency accumulated an appreciation of 2.71 percent in three sessions of consecutive gains. This advance allowed it to be the currency with the best performance in that period, with respect to a basket of 44 currencies followed by Bloomberg.
The previous week Trump said he would more flexible in the NAFTA negotiations, which has also supported the peso.
The index that measures the dollar behavior against a basket of ten currencies lost 0.61 percent, situation that took it to a minimum not seen since the beginning of January 2015.
Doubts persist
The peso is likely to slow down its appreciation at the current levels, given the uncertainty on the subject of the progress of the sixth round of NAFTA renegotiation, which is scheduled to begin next week.
Also, the results of the presidential elections in the country will prevent the market from continuing to adopt positions in favor of the peso. The main support of the exchange rate is at the level of 18.72 pesos per dollar, said a document prepared by Siller.
