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The Superweight: A Week of Volatility for the Mexican Peso

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The Superweight: A Week of Volatility for the Mexican Peso

The Superweight has been the object of attention throughout the week. The position of the Mexican currency against the dollar keeps the economy in constant motion and here we share more details about what happened this week.

After having reached a level of up to 18.21 pesos per dollar on Thursday night, the Mexican currency ended the week at 17.09 units in wholesale operations reported by Bloomberg.

The Superpeso accumulated a loss of 2.9% or 47 cents compared to the previous Friday and it was its second consecutive week of losses against the dollar. Among the 36 main currencies in the world, the peso was the most depreciated during the week.

So far this year, the national currency accumulates a loss of 0.8% or 14 cents.

The depreciation during the week was mainly due to two factors: on the one hand, the global fear that Israel unleashed by attacking the territory of Iran, which confirms an escalation of tensions in the Middle East and may cause additional retaliation in the coming days, explained Gabriela Siller, chief economist at Banco Base.

Secondly, investors and traders continue to consolidate the expectation that the United States Federal Reserve (FED) will keep its main interest rate unchanged for longer.

The strong volatility reduces the attractiveness of the national currency, as operations that seek to take advantage of the high rates in Mexico become more risky, which has already begun to be observed in the Chicago futures market. After the peso, the most depreciated currencies in the week were the Indonesian rupiah, with a negative balance of 2.6%, as well as the Brazilian real, whose depreciation reached 1.6 percent.

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On the contrary, the most appreciated currencies in the week were the Chilean peso, 1.3%; the Peruvian sol, 0.6%, and the Czech crown, 0.4 percent.

At retail, the dollar ended up selling on Friday at 17.51 pesos in CitiBanamex windows, 2.6% or 44 cents above the close of the previous week.

For its part, the main indicator of the Mexican Stock Exchange gained 0.2% yesterday and ended at 55,858 units. Of the 35 most traded companies, 15 made profits and 20 lost.

Banorte analysts agreed that the attention of market participants remains on the evolution of the conflict in the Middle East, as this situation revived concerns about inflation after the rise in oil prices.

17.09 pesos per dollar was the exchange rate in wholesale operations at the end of this week.

0.8% is the loss that the national currency accumulates so far this year.

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