Opening quote today, August 22, in Mexico: inflation keeps the peso down against the dollar

The peso continues to lose ground against the dollar this morning, after the US currency was traded at 19.49 pesos on average during today’s opening session, which represents a change of 1.09% compared to the previous day’s price, when it closed at 19.28 pesos.

The financial group Monex, in its exchange rate analysis today, indicated that the Mexican peso extends the decline observed in previous sessions and is positioned in second place among the currencies of emerging countries that show the greatest losses against the dollar, after the inflation and GDP figures in Mexico, which reinforce the narrative of cuts by the Bank of Mexico (Banxico).

It highlighted that today the publication of the minutes of the monetary policy meeting of Banxico in August is expected, which would give a clearer picture of the expectations of the cycle of cuts in the remainder of the year.

In the last seven days, the US dollar has increased by 4.55% and in year-on-year terms it has accumulated a rise of 13.74%.

Regarding the changes of this day compared to previous days, it has chained four successive dates in positive figures. In the last week, the volatility is higher than that accumulated in the last year, so it is presenting a more unstable behavior.

The Mexican economy has experienced a series of contrasts, which will continue, according to the forecasts of the Bank of Mexico (Banxico) for this 2024.

Regarding the exchange rate, the central bank expects the dollar to trade throughout the year between 17.68 pesos and up to 18.67 pesos per unit. A conservative forecast considering that the national currency destroyed the forecasts for 2023 by breaking the floor of 17 pesos per unit, which had not been seen for eight years.

Inflation, on the other hand, is expected to continue its downward trend, since it reached its historical maximum of 8.7% at the end of 2022. Banxico forecasts inflation of 4.02% in 2024, however, the ideal of three percentage points is not expected to be reached soon.

The above, however, contrasts with the economic growth forecasts, since the central bank expects it to be 2.29% in 2024.

The Mexican peso is the legal tender of Mexico and is the first currency in the world to use the $ sign, which was later adopted by the United States for the dollar.

This currency is the fifteenth most traded currency in the world, as well as the most traded in Latin America and the third on a continental level only behind the US and Canadian dollars.

Currently, the abbreviation MXN is used to talk about the Mexican peso, but before 1993 the acronym MXP was used.

The coins that are normally used in Mexico are semicircular in shape and have the national emblem on the back. One Mexican peso is equivalent to 100 cents. There are coins of 1, 5, 10 and 20 pesos; while there are bills of 20, 50, 100, 200, 500 and 1,000 pesos.

Source: infobae