The peso weakened during this Wednesday’s session to levels not seen since mid-September and ended the day near 20 pesos.
The decline of the national currency occurred in the face of a general advance of the dollar and renewed concerns about an eventual victory of the Republican candidate Donald Trump in the November presidential elections.
The Mexican Stock Exchange (BMV), meanwhile, rose hand in hand with its peers abroad, in a market with its sights set on the start of the corporate reporting season for the third quarter.
The dollar stood at 19.9406 pesos, a drop of 1.23% for the national currency compared to Tuesday’s close, and the third depreciation in a row, according to Banxico data.
During the session, the peso weakened to 19.9572 per dollar, a level not seen since September 11, when the Senate approved the judicial reform, according to a report from the financial group Base.
The firm’s analysis area also highlighted that the peso was the most depreciated currency against the dollar, and that in the first three days of the week it accumulated a decline of 3.25%.
“The depreciation of the peso in recent sessions is due to the increasing probability that Donald Trump will win the elections in the United States, which gives relevance to his comments about the possibility of imposing tariffs on automotive imports from Mexico,” the group indicated. financial.
The former president of the United States stated that if he wins the elections he could impose tariffs of more than 200% on vehicles imported from Mexico, one of the engines of national economic activity.
Read: ‘If I am president, Mexico will not sell a single car in the US’: Trump
Base added that although Mexico benefited from the United States trade war with China, and the signing of the USMCA during Donald Trump’s first presidential term, the Republican’s threats about new tariffs generate uncertainty, which could lead to investment projects in Mexico are stopped or canceled for fear of reprisals.
He maintained that for this reason the announcement of new investments in Mexico announced by Claudia Sheinbaum’s government was ignored by the market.
He added that the depreciation of the peso was also explained by the expectation that the Federal Reserve will be cautious to continue cutting its interest rate.
“For this reason, the dollar strengthened 0.32% according to the weighted index and accumulated an advance of 0.85% in the first three days of the week,” he explained.
Read: Amazon investments in Mexico since 2015 total more than 110 thousand million pesos
The financial group Monex considered in an analysis after the close of the day that the peso was affected by the feeling of global risk aversion and Donald Trump’s “compromising comments” about tariff increases.
“Towards overnight, we would expect the peso to oscillate in a range between $19.82 and $19.98, considering the current situation and waiting for very relevant data tomorrow,” he added.
The CIBanco group said in an analysis note that just three weeks before the US elections, the financial markets, particularly the currency markets, seem to begin to incorporate the prospects of a Trump victory into their quotes.
The BMV advances 0.20%
The benchmark S&P/BMV IPC stock index rose 0.20% to 52,483.62 points, with a volume of 250 million shares traded, above the daily average of 200 million in recent months.
Carlos Slim’s América Móvil shares gained 2.89% to 16.73 pesos, after reporting its quarterly results the day before, which were described as positive by specialists.
In the secondary debt market, the 10-year bond yield jumped nine basis points to 9.78%, while the 20-year rate rose 10 basis points to 10.08%.
With information from Reuters and Francisco Rivera
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