Mexican peso takes another fall against US dollarBusiness Mexico 

Mexican peso takes another fall against US dollar

Mexico City, Mexico –The Mexican peso took another fall against the US dollar yesterday, registering a depreciation of 0.6 percent, increasing the exchange rate to 19.19 units, according to data from the Bank of Mexico.

At the official closing yesterday, the peso registered a second fall that took the dollar to 19.22 units, a level that has not been seen since March.

mexican peso, US dollar exchange

The strength of the dollar in the international market was the main factor of the depreciation of the peso in the session yesterday, an element that was also reflected in other emerging currencies. Yesterday, Indeed, the MSCI Emerging Markets Currency Index, reported a decrease of 0.8 percent over the last four days.

“The flows were heavily biased in buying dollars during the session,” explained George Lei, currency strategist at Bloomberg .

The possibility of the Federal Reserve raising its target rate this year, he added, has raised 10-year Treasury yields to a high unseen since May, raising the attractiveness for those dollar-denominated assets.

At the local level, the peso has also been hit by nervousness over trade talks with the United States, analysts say.

“The Mexican currency was at its weakest level in the last six months amid high uncertainty surrounding the NAFTA negotiations,” said Sergio Luna, an economic analyst at Citibanamex.

Rating agency Standard & Poor reported yesterday that if NAFTA were terminated, it would reconsider its current credit rating in Mexico, which also triggered volatility in the exchange rate.

This agency joined Moody’s, who warned last week that it could also change the rate if an adverse scenario materializes.

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