Despite the elections, the peso recovers

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Before the elections on Sunday, July 1, the retail dollar ended up selling to bank tellers at 20.15 pesos, or 15 cents more than Thursday's close, partly because of the announcement. made by Canada to impose tariffs Despite the above, the dollar closed the week with a drop of 15 cents, with which the national currency accumulates two weeks in a row in recovery. The recent rebound contributed to the peso's depreciation against the green currency of 1.33% at the end of the first half, placing itself as one of the lowest among emerging currencies.

Earlier this week, Banco de México (Banxico) 's CEO of operations and payment systems, Jaime Cortina, pointed out that he does not expect a market reshuffle or a depreciation of the peso in the event that the main candidate in the polls, Andrés Manuel López Obrador, wins the presidential elections of the 1st of July, because the markets have already assimilated this possibility.

However, other risk factors persist for the Mexican peso: the growing trade protectionism of the United States, the renegotiation of the North American Free Trade Agreement (NAFTA) and the threat of new tariffs that could be applied by the Donald Trump government to imported automobiles.

The exchange rate performance from the night of this Ingo sun will depend on the election results, said Gabriela Siller, director of economic and financial analysis of Banco Base.

The confirmation of the success of Lopez Obrador could lead to an exchange rate between 19.70 and 20.30 pesos per dollar on the wholesale markets. , with the possibility that the peso will gradually appreciate during the month of July, as long as an opposition to the legislature is confirmed and the post-election statistics of previous years will be repeated.

If the majorities are reached in both houses of the Union Congress, the exchange rate could exceed 20.50 pesos to the dollar and come closer to 21 pesos for a dollar in the short term, because there would be an increase in speculative bets against the peso, Siller adds.

that the first statement of the elected president will also influence the exchange rate, as well as information on economic policy The new administration, which refers to public finances and trade relations with the United States

Siller, n & Does not exclude the continuation of exchange rate volatility in the second half, because of the protectionism of the Donald Trump administration. because the renegotiation of NAFTA has yet to be concluded and, at the same time, the imposition of new tariffs between the United States and its main partners represents a serious risk to global economic growth.

The volatility of the Mexican peso should continue the contagion effect of the Brazilian real and the South African rand, currencies that have depreciated by 17.04% and 11.05% respectively during the first half of the year .