The peso and the BMV weakened after the Federal Reserve (Fed) reduced its reference interest rate, as the market expected, but signaled a slow pace of cuts next year.
The US central bank reduced the cost of borrowing by 25 basis points to a range between 4.25% and 4.50% and, according to its projections, there would be only two rate cuts of a quarter of a percentage point until the end of 2025.
The dollar stood at 20.3720 pesos at the close, a depreciation of 0.74% for the national currency compared to the previous session, and the largest decline since November 26, according to Banxico data.
“The markets did not like the Fed’s restrictive tone, since an interest rate that will remain high longer implies lower company valuations,” said Gabriela Siller, director of analysis at the Base firm.
Read: Federal Reserve reduces interest rate, to a range between 4.25% and 4.50%
Now investors’ attention is focused on the Bank of Japan’s last monetary policy decision of the year in the evening, while the Bank of Mexico will do the same on Thursday.
Before hearing the Fed’s announcement, the peso advanced 0.46% to 20.0750 per dollar.
BMV closes at its lowest level since the end of November
Also in its third day of decline, the benchmark S&P/BMV IPC stock index fell 0.90% to 49,968.44 points, its lowest closing level since November 29.
The titles of the Orbia conglomerate led the declines, with 6.38% less to 15.41 pesos, followed by those of the Regional bank, known as Banregio, which fell 5.79% to 122.75 pesos.
In the secondary debt market, the 10-year bond yield rose three basis points to 10.19%, while the 20-year rate rose one basis point to 10.51%.
Read: Premature to talk about economic effects of possible tariffs: Fed
With information from Reuters and Francisco Rivera
Follow us on Google News to always stay informed
