Peso starts the year with continued appreciation against the dollar

The peso will close the week with gains against the dollar in a setting of “general optimism among investors”, as reported by Reuters. The spot rate on Friday morning was 19.20 and closed at 19.15 pesos to the dollar. The bank exchange rate stands at 19.73 per dollar, according to Citibanamex.

Based on reports published by Banco Base, the peso began Friday’s session with an appreciation of 0.28% (5.5 cents) compared to close of trading on Thursday.

This marks five consecutive days of appreciation, accumulating 1.8% gain in that period.

The gain of the peso occurs even as the dollar strengthens. The dollar index, which measures the greenback’s performance against six currencies (including the Euro, Pound, Yen, Canadian Dollar, Swedish Korner, and Swiss Franc), rose 0.3% to 105.45, after briefly hitting a four-week high at 105.52. 

The index is on track to post a weekly gain of almost 1.9%, the biggest since September.

The U.S. government reported on Friday that there was strong job growth in December and unemployment fell to 3.5%. 

“The solid job creation in the United States is good news for the consumption and demand of Mexican exports,” Banco Base said in a note sent to clients.

The Bank of México (Banxico) indicated that interest rates will likely be raised again in February, but at a slower pace, following a governors’ meeting on Thursday. In December, the central bank hiked interest rates to a record 10.5%.

The peso was considered one of the best-performing global currencies of 2022.

“The factors that have driven the appreciation of the peso against the dollar in 2022 have not deteriorated,” said Janneth Quiroz, an analyst at Monex, as quoted in El Economista newspaper. The peso closed 2022 at 19.50 to the dollar with an annual appreciation of 4.87%.

With reports from El Financiero, Milenio, Forbes and El Economista

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