The markets in Mexico fell this Friday, however they culminated with accumulated gains a week of strong volatility, while investors continue to weigh the risks for the second largest economy in Latin America with the return of Donald Trump to the White House.
According to press reports, the president-elect called on Robert Lighthizer, a strong supporter of tariffs, to return as United States Trade Representative.
Lighthizer was a key figure in the renegotiation of the North American Free Trade Agreement, NAFTA, with Mexico, currently USMCA.
The peso was trading at 20.1730 per dollar almost at the end of business, with a depreciation of 1.9% compared to the LSEG reference price on Thursday, when it advanced 1.42%.
A day before, after the US election day, it shot up to 20,8038 units, its worst level in two years.
Read: Fitch warns of more state debt in Mexico due to possible Trump measures
The marked retreat of the session was in line with a weak performance shown by a large part of assets abroad, after a new stimulus package in China failed to meet expectations, driving a general climate of risk aversion.
Even so, the peso ended the week with a cumulative gain of around 0.50%. However, the estimates are not entirely optimistic.
“If the political and economic situation continues as it is until now, the expectation is that the exchange rate will approach 21 pesos per dollar in the medium/long term,” said Enrique Bazaldúa, independent foreign exchange market operator.
On the Chicago Mercantile Exchange, speculative positions in favor of an appreciation of the Mexican peso decreased, after having reached their highest level since August last week.
Lee: Trump did not ask Lighthizer to direct EU trade policy: Reuters
In Mexico, attention began to turn to Banco de México’s next monetary policy announcement on Thursday, after the Federal Reserve cut interest rates the day before and local figures were released that showed that, although the General inflation accelerated in October, the underlying index continued to decline.
The following week will also be marked by the presentation of the Government’s budget package for next year, in which President Claudia Sheinbaum has the challenge of reducing the large fiscal deficit, an issue of concern among rating agencies and investors.
Stock market accumulates gain of 2.42%
The benchmark S&P/BMV IPC stock index lost 0.89% to 51,845.17 points, although over the course of the week it added a return of 2.42%.
The titles of the retailer La Comer led the losses on Friday, with 3.78% less to 36.42 pesos, followed by those of Gentera, specialized in credit services, which subtracted 3.27% to 26.30 pesos.
In the secondary debt market, the 10-year bond yield fell eight basis points to 9.89%, the same as the 20-year rate, which ended at 10.14%.
With information from Reuters
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