The peso is trading at a loss when investors opt for safe haven assets


By CAPosts 15 October, 2020 - 08:37am 67 views

The Mexican peso depreciated on Thursday due to the strength of the dollar, as expectations diminished that an agreement would soon be reached for a new fiscal stimulus package in the United States to face the crisis due to the coronavirus. © Photo: iStock Investors were also seeking safe haven assets for fear that rising COVID-19 cases around the world would affect global growth. The local currency was trading at 21.44 per dollar, with a loss of 0.53%, equivalent to 11 cents. "Most of the currencies in the broad basket of main crosses show a depreciation against the dollar, with the Mexican peso being the sixth most depreciated, given an increase in risk aversion related to the growth in the number of new cases of coronavirus in countries in Europe ", indicated Gabriela Siller, director of Economic-Financial Analysis of Banco BASE" The markets react negatively as the second wave of infected by the pandemic will probably cause a brake on the economic recovery in the region and it is highly probable that the same happens in other regions of the world, "he explained. "For today we estimate a fluctuation range between 21.25 and 21.70 pesos per dollar, considering key levels of support at 21.20 and resistance at 21.75 pesos per dollar," Monex indicated for its part in its currency report. US Treasury Secretary Steve Mnuchin said he and House Speaker Nancy Pelosi are "very far apart" on some details of another aid package and that it would be difficult to reach an agreement before the US elections. November 3. On the other hand, some European countries are reinstating curfews and closures to try to contain the rise in coronavirus cases.