The currency extended its losses after the president Claudia Sheinbaum said Sunday It will announce in a public act tariff and non -tariff measures, in response to the rates imposed by the United States to Mexican products.
The currency quoted at 20,9360 per dollar, With a depreciation of 1.2%, expanding its initial losses, although during the president’s speech he briefly quoted at the top of 21 units.
The economy of Mexico, dependent on trade, sends around the 80% of its exports to the United States.
The fall of the Mexican currency
The Aztec currency has lost 22% since last Aprilhaving been the main lightning rods of feeling both for concerns about American trade and internal political and constitutional changes.
The indebtedness costs of the Bond market in Mexico also constantly fell in the last two months due to the expectation that a probable blow to the economy forces the central bank to continue cutting the interest rates.
A survey published by the Central Bank on Monday showed that Private sector analysts now expect that the economy grows only 0.81% this year, a fall since its already modest January 1% forecast.
Lee Hardman, MUFG analyst, said the Initial weight movements had been relatively modesttaking into account the magnitude of the tariffs that both Mexico and Canada support now.
“Price behavior suggests that market participants maintain the hope that tariff increases will not be maintained for a long time, which would help limit commercial and economic disturbances,”Hardman said.
The longer they are in force, the more likely it will be that the economy of Mexico falls into a recession, Hardman added.
“We continue to believe that both currencies (weight and Canadian dollar) could fall around 5% -10% in response to more persistent tariff increases.” The Canadian dollar has dropped around 4% since Trump’s electoral victory last November.
The Mexico Stock Exchange accumulates a decline of almost 5% in the last two weeks, although there is still 3% above what was before Trump’s choice.
Spanish banks Santander and BBVA, both with credit branches in Mexico, dropped 5% and 5.8% respectively in European morning operations.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
