Wednesday, 14 Nov 2018
Business

The Mexican peso reverses losses thanks to Trump

CITY OF MEXICO (Expansion) –

The Mexican peso reversed its losses on Wednesday after the president of the United States, Donald Trump, said that his country could negotiate an independent trade pact with Mexico .

In bulk, the dollar closed at 18.8525 pesos on sale, which meant a gain of 0.16% for the national currency compared to the previous official closure , indicated data from the Bank of Mexico (Banxico). Earlier the dollar touched 19 pesos.

In bank windows, the green ticket was sold at 19.15 pesos, that is, 5 cents cheaper compared to the last price on Tuesday, and the purchase was at 18.35 pesos, according to the quote of Citibanamex. In BBVA Bancomer, the US currency is sold at 19.25 pesos, one cent more expensive compared to Tuesday, and the purchase at 17.40 pesos.

Trump said Washington was approaching a trade agreement with Mexico, although he mentioned that it could be bilateral and that later I would work in another with Canada. Mexican Economy Secretary Ildefonso Guajardo announced that they will resume negotiations on July 26.

“Investors are excited about the possibility of an early negotiation,” Jorge Gordillo, director of Economic and Stock Market Analysis at CI Banco, told Reuters.

Another specialist mentioned that it gives optimism to the market that there is certainty of an agreement.

The peso had been losing ground before the comments of Trump, due to a strong dollar caused by an optimistic assessment of the US economy by Federal Reserve Chairman Jerome Powell.

“The dollar with gains after optimism about the strength of the economy of Jerome Powell of the Fed,” said Grupo Financiero Banorte in an analysis note.

The dollar index of Bloomberg, which measures the performance of the US currency against the main currencies of the world, advances 0.29% to 1,185.57 points.

Federal Reserve Chairman Jerome Powell said on Tuesday he believes the United States is heading for years of more sustained growth .

In a written testimony delivered to the Senate Banking Commission and in his response to questions about a possible “trade war” he largely dismissed the risks and affirmed that there will be a positive outcome if the government’s negotiations finally give rise to a world of lower tariffs.

“With an appropriate monetary policy, the labor market will remain strong and inflation will remain close to 2% for several more years,” Powell said in the prepared comments.

“The behavior of the exchange rate can also be due to the low seasonal liquidity due to the summer effect,” said the director of Economic-Financial Analysis of Banco BASE, Gabriela Siller, in a report.

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