La Jornada: Stock markets fall in the US and Mexico; the dollar rises

As investor anxiety grew over the lack of progress in the dialogue between the United States and Iran, the dollar strengthened and stock indices fell yesterday.

While Donald Trump, president of the United States, retracted and extended the ceasefire with Iran until the talks conclude, the DXY index, which measures the behavior of the dollar against a basket of six international currencies, rose 0.28 percent, to 98.19 units.

Risk aversion boosted demand for safe-haven assets during the session. In addition, the appearance of Trump’s nominee to replace Jerome Powell as head of the Federal Reserve (Fed), Kevin Warsh, before the Senate Banking Committee, influenced the day.

Warsh mentioned that, if confirmed as Fed chairman, he will be an independent actor and that Trump has not asked him to lower the interest rate, after several senators, mainly Democrats, asked him if he could be a “puppet” of Trump.

The above generated confidence in the market and led to the advance of the dollar, analysts commented. In this context, the Mexican peso weakened, presenting a daily depreciation of 0.38 percent and closing at 17.3678 units per dollar spot. According to data from the Bank of Mexico, the exchange rate operated between 17.4150 units and 17.3060.

A few hours after the end of the ceasefire stipulated by the United States and Iran, the S&P 500 ended the day with 0.63 percent less at 7 thousand 64.01 points. The Nasdaq lost 0.59 percent and stood at 24,259.96 points. The Dow Jones fell 0.59 percent, to 49,149.60 integers.

Unreasonable demands

The market closed lower, reversing an advance that took the S&P 500 near a new high. Peace negotiations between Washington and Tehran stalled after Tehran refused to participate in scheduled talks in Pakistan, citing “unreasonable American demands.”

After two previous positive sessions, within its long-term upward trend, the Price and Quotations Index of the Mexican Stock Exchange, hand in hand with the falls on Wall Street, fell 1.82 percent, to 68,809.17 points.