The peso had its largest decline this Thursday since December 30, while investor caution grows as Trump’s return to the White House approaches.
The dollar stood at 20.8187 pesos at the close, a depreciation for the national currency of 1.60% compared to the previous session, according to data from Banxico.
The pressures are also attributed to growing expectations of an interest rate increase by the Bank of Japan next week, which would play against the “carry trade” strategies that have benefited the peso for years.
“Investors are adopting a ‘wait and see’ stance in the face of uncertainty about the future of trade relations between the United States and Latin America,” said Quásar Elizundia, market research strategist at Pepperstone.
“This uncertainty can translate into an increase in demand for the dollar as protection, putting pressure on the region’s currencies,” he added.
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The Base financial group indicated in an earlier report that among the causes of the peso’s depreciation was the strengthening of the Japanese yen amid speculation that Japan’s central bank will raise its interest rate this month.
The firm added that the depreciation of the peso was also due to the fact that in the commodities market, oil began the session with a downward correction, after having reached a maximum of 80.59 dollars per barrel not seen since July 19.
Donald Trump will assume a second term as president of the United States on Monday with the threat of imposing heavy tariffs on the country’s three largest trading partners – Canada, Mexico and China – including a 25% tariff on Mexican imports until he takes action against drugs and irregular migration.
83% of national exports were destined to the United States between January and November of last year, becoming one of the main engines of the country’s economy.
With information from Reuters and Francisco Rivera
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