La Jornada: Mexican peso appreciates after US job losses

The Mexican peso strengthened yesterday amid a global decline in the dollar, after an unexpectedly weak U.S. jobs report fueled doubts about a possible interest rate hike by the Federal Reserve (Fed) at its September meeting.

In wholesale trading, the exchange rate closed at 17.13 pesos per dollar, according to the Bank of Mexico’s closing price. This represented a 7-centavo (0.41 percent) gain for the Mexican currency during the session; it appreciated 18 centavos (1.05 percent) over the week.

The Mexican peso, like other Latin American currencies, benefited from the global decline of the dollar, which fell against major currencies, including the yen and the euro, after data showed a drop in U.S. employment in July. This generated concerns about the economy and weakened the case for the Fed to raise interest rates.

Locally, it was reported that annual inflation moderated in July, in line with forecasts, which benefited the peso. However, persistent pressures on the core inflation component support the view that the central bank will maintain a cautious stance for the foreseeable future.

In the stock market, the benchmark index of the Mexican Stock Exchange, the S&P BMV/IPC, rose 0.82 percent to close at 66,938.64 points, after two days of losses. The index was boosted by a strong performance in the mining sector. The week ended virtually unchanged.

Shares of Industrias Peñoles, the world’s largest silver producer, led the gains, rising 3.85 percent, followed by Grupo México, one of the world’s leading copper producers, which gained 2.26 percent.

Meanwhile, the New York Stock Exchange closed higher following the release of U.S. employment data. The S&P 500 rose 0.62 percent to a record 7,757.62 points; the Dow Jones advanced 0.28 percent and the Nasdaq gained 1.30 percentage points.