Japan, another pressure factor for the peso

Japan became another cause of nervousness in the Mexican exchange market and was added to the arrival of Donald Trump to the White House and his announcements about tariffs and deportations of migrants.

Speculative positions on the peso allow us to predict that the Mexican currency will be under pressure due to the change of government in the United States and the increase in the interest rate in Japan, which could take the exchange rate to between 21 and 22 pesos per dollar in the short term.

In international markets, where the Mexican peso is one of the most liquid currencies among emerging markets, it operates at 20.7711 per dollar. On Friday it closed at 20.7753 pesos per wholesale dollar.

The markets await with fear the arrival of Donald Trump’s trade tariffs, who has promised to increase them on products from China, Europe, Mexico and Canadaexplained Jorge Gordillo, director of economic and stock market analysis at CIBanco.

He added that the restrictions on Mexican exports will not necessarily cause an economic crisis, but they will cause a strong jam.

Another impact, he added, would be on the exchange rate. As American consumers and businesses substitute Mexican goods for local products, this would put upward pressure on prices and force the Federal Reserve to raise interest rates. Thus, the dollar will strengthen across the board, and exchange rates close to 22 pesos per dollar could not be ruled out. spot.

Meanwhile, next Friday the Bank of Japan is expected to raise its interest rate from 0.25 percent to 0.5 percent because inflation rose from 2.9 to 3.4 percent, and underlying inflation from 2.7 to 3 percent.

The above would make the carry trade (borrowing in currencies such as the yen to invest in assets denominated in pesos), which will put downward pressure on the Mexican currency.

Assume the presidency and climb the list of Forbes

The price of Donald Trump’s newly launched cryptocurrency continued to rise yesterday, to the point that the amount in the hands of the next US president and his associates is valued at more than $35 billion.

Some 200 million tokens (units) of this digital currency were placed on the market since Friday. Another 800 million will be issued within three years and will go entirely to Trump and his partners in this project.

The Trump, the name of this new electronic currency, reached a value of about 45 dollars per unit, which raised its capitalization to 9 billion.

At that price, the 800 million tokens that will go to Trump have an estimated value of $34 billion, which would place the Republican among the 20 wealthiest men in the United States.

Not counting the new profit, the magazine site Forbes estimates Trump’s wealth at $6.7 billion.