A Latin American currency hit its highest in seven years: what’s behind it

A Latin American currency hit its highest in seven years: what’s behind it

The appetite for emerging market assets and the rise in commodity prices were some of the causes of this strong rise.


The Mexican peso climbed this Tuesday to its highest since 2016. The currency appreciated on the back of appetite for emerging market assets and amid a rally in commodity prices, while the stock market recorded one of its best days so far this year.

The local currency quoted at 17.3763 ​​per dollar almost at the end of business, appreciating 0.5% against Monday’s Reuters reference price. The coin, which he spun four consecutive sessions on the risesurpassed the technical support of 17.40 pesos and came to operate at a ceiling of 17.3644 pesos per dollar, a level not seen since May 2016.

“After drilling the previous annual low, the peso could pose a possible fall (rise) towards the 2016 annual lows (maximums) of 17.05, the level prior to the psychological barrier of 17.00” units, OctaFX analysts said in a note to clients.

The operators maintained that, among the causes, was the dissemination of a solid report on the production and exports of cars from Mexico. The Colombian peso also had one of the best performances among Latin American currencies.

On the stock front, the benchmark S&P/BMV IPC index rose 1.7% to close at 54,432.19 points, its highest daily gain since January 6. The shares of the airport operator OMA led the increases, with a 4.5% increase to 189.46 pesos, followed by the papers of the Orbia conglomerate, which added 4.4% to 39.20 pesos.

In the debt market, the primary yields of the Treasury Certificates (Cetes) fell in the weekly auction of government securitieswith the exception of the 28-day rate, was placed at 11.3%, 12 basis points above its previous auction.

Source: Ambito

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