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Mexican peso sells at lowest since December

The exchange rate of the peso against the US dollar sold yesterday at 19.15 peso, its lowest level since December 5. The main drivers of this decrease were the weakness of the dollar in the international market and the expectation of a more conciliatory position of the Administration of Donald Trump with respect to 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, as market participants anticipate that the European Central Bank and the Bank of Japan could adopt a more restrictive monetary stance in the year,” explained Gabriela Siller, for Analysis in Banco Base.

The interbank dollar closed yesterday at 18.858 units, its lowest level in six weeks, according to information from the Bank of Mexico. On the day the peso gained 14.70 cents, equivalent to 0.77 percent.

At 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 best performing currency in that period, with respect to a basket of 44 currencies followed by Bloomberg.

The previous week, Trump declared that he would be more flexible in the NAFTA negotiations, which has also supported the peso.

The peso is likely to slow its appreciation at current levels , given the uncertainty over what progress will be made in the sixth round of NAFTA renegotiation, which is scheduled to begin next week.

Likewise, 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 for the exchange rate is at the level of 18.72 pesos per dollar, said a document prepared by Siller.