Mexico City, Mexico — The Mexican peso starts the week with a downward trend against the dollar, where market participants are waiting for the fiscal plan in the United States and monetary policy announcements for Mexico during the week.
The dollar is sold at 18.98 pesos, which means a marginal depreciation of 0.19 percent for the national currency compared to Friday’s close, according to data from Bloomberg and the Bank of Mexico (Banxico).
In bank windows, the greenback sold at 19.30 pesos, that is, 10 cents more than the previous closing, but bought at 18.50 pesos, according to Citibanamex.
The Federal Reserve of the United States will emit its last announcement of monetary policy of this year, of which an increase in the interest rate is expected to a range of between 1.25 percent and 1.50 percent.
After the announcement, the peso-dollar exchange rate is expected to remain stable and the peso is likely to recover temporarily due to that decision in the United States, said the director of Economic-Financial Analysis of Banco BASE, Gabriela Siller, in a report Monday.
“Especially since this makes it more likely that Banxico will adopt a more restrictive position in the session on Thursday, with an increase to the benchmark rate of 25 basis points to 7.25 percent,” Siller added.
The Bank of Mexico will announce its monetary policy decision this week, the first with Alejandro Díaz de León Carrillo as governor of the central bank after the departure of Agustín Carstens, and with one less deputy governor on the Board, after Díaz de León will leave that position to command the monetary entity at the proposal of the President of Mexico Enrique Peña Nieto.
“In case of a rise in the cost of money (in Mexico), the Mexican peso would cut part of the recent losses,” CI Banco said in a report.
Siller said that this week will begin pre-campaigns headings for the election of 2018. Next year’s elections are a factor that can affect the behavior of the peso against the dollar, in addition to the renegotiation of the Free Trade Agreement of America North (NAFTA).