Puerto Vallarta, Mexico – At the start of today’s session, the Mexican peso recovered part of the losses it suffered against the U.S. dollar last week. After closing on Friday at 20.26 pesos per dollar, the exchange rate improved to 20.11 pesos per dollar by 7:20 a.m. Mexico City time, marking an appreciation of 0.77%, according to real-time data from Investing.com.
The rebound comes amid persistent market uncertainty due to the upcoming U.S. presidential elections scheduled for tomorrow, Tuesday, November 5, and the Federal Reserve’s monetary policy meeting set for November 6 and 7.
“Today, the peso is correcting part of the decline observed at the close of last week as the presidential elections in the United States approach and the polls continue to show a tight margin between the two candidates. Additionally, local inflation figures and the Fed meeting could help offset the increase in volatility expected during the week,” said Janneth Quiroz Zamora, Director of Economic, Foreign Exchange, and Stock Market Analysis at Grupo Financiero Monex.
The Mexican currency’s advance aligns with a decline in the U.S. dollar against other major international currencies. The Dollar Index, which measures the greenback’s performance against a basket of six major currencies, was trading down 0.62% at 103.64 units.
Key Week for Global Markets
This week is pivotal for determining the direction of global markets toward the end of the year, with the U.S. elections and the Federal Reserve’s monetary policy decision taking center stage. Market expectations point to a 25 basis point cut in the interest rate by the Fed.
“The first element—the elections—is the biggest factor of uncertainty in global financial markets today. The final behavior of the exchange rate will depend on who wins—Harris or Trump. For now, the market seems to reflect a greater possibility of a Republican victory. If this scenario is confirmed, the pressure on the Mexican currency could intensify a little more, although we believe that temporarily and as the days go by, the peso could cut losses. In an eventual Harris victory, the initial reaction of the peso would be positive and could cause a bullish rally for the rest of the week,” commented Jorge Gordillo Arias, Director of Economic and Stock Market Analysis at CIBanco.
Federal Reserve’s Anticipated Move
Regarding the Fed meeting, monetary authorities are expected to announce a 25 basis point cut to the reference interest rate, potentially leaving the door open for another cut at their last meeting of the year.
“Given the above, during the week, the Mexican currency could fluctuate in a wide range between 19.50 and 20.70 spot,” Gordillo added.
Analysts suggest that investors remain cautious during this period of heightened volatility, keeping an eye on both international and local economic indicators that could influence currency movements.
Puerto Vallarta, Mexico - At the start of today's session, the Mexican peso recovered part of the losses it suffered against the U.S. dollar last week. After closing on Friday at 20.26 pesos per dollar, the exchange rate improved to 20.11 pesos per dollar by 7:20 a.m. Mexico City time, marking an appreciation of 0.77%, according to real-time data from Investing.com.
