La Jornada: Mexican markets have their best streak in 6 weeks

FThe Mexican peso and the stock market yesterday recorded their best week since mid-June, while investors gauge the geopolitical risks in the Middle East and the possibility of a rate hike in the United States.

In wholesale operations, the exchange rate closed at 17.32 pesos per dollar, according to the Bank of Mexico, which represented an advance of one cent (0.10 percent), compared to Thursday’s session. During the week, the currency recovered 16 cents (0.93 percent) and during the month it appreciated 17 cents (1.01 percent).

The dollar fell 0.26 percent yesterday and during the week it recorded a drop of 1.6 percent against a basket of six currencies, its largest weekly decline since the end of January.

The weakening of the dollar occurred after the announcement, in the middle of the week, of the Federal Reserve, which kept the reference interest rates unchanged, between 3.50 and 3.75 percent, as the market expected, in a decision divided among the members of the monetary policy committee.

The dissent of three officials in favor of an increase in income to contain inflation reinforced expectations of a more restrictive monetary stance. Two of these dissident members declared yesterday that action is needed now to bring inflation back to the 2 percent target.

Meanwhile, the Japanese yen remained under pressure yesterday after that nation’s Central Bank kept interest rates unchanged at one percent, while markets tested Tokyo’s resolve following a coordinated intervention to shore up the fragile currency.

At the local level, the Bank of Mexico will announce its monetary policy decision next week. The market expects it to maintain the key rate at 6.50 percent, after a prolonged monetary relaxation cycle.

In the stock market, the benchmark index of the Mexican Stock Exchange, the S&P BMV/IPC, lost 0.53 percent, to 66,936.99 points. However, it accumulated a weekly gain of 0.83 percent, the best since mid-June, however it accumulated a slight monthly decline of 0.04 percent.

Megacable shares led the losses yesterday, with 4.67 percent; They were followed by Gruma titles, which lost 4.0 percent.

The New York Stock Exchange closed higher yesterday, driven by the good results of Amazon, after a month of ups and downs due to the resumption of hostilities in the Middle East and concerns about artificial intelligence.

The Dow Jones rose 0.53 percent, the technology Nasdaq gained one percent and the expanded S&P 500 grew 0.70 percent. The three main US indices were close to the levels they recorded at the end of June.

(With information from Reuters)