The capital | Foreign exchange market affected by geopolitical factors

City In this second quarter of the year, the peso closed with a depreciation of 9.23% or a peso and 68 cents, trading around 19.86 pesos for a dollar , due to an increase in speculative bets against the currency. 83.5% national

The above, according to statistics from the Chicago Futures Market, which was due to the postponement of the renegotiation of the North American Free Trade Agreement (NAFTA).

risk aversion to harsher US protectionist policies and threats to the European Union and China, as well as the possibility that the Federal Reserve raises interest rates four times during the year. 1965 9007] Other factors that contributed to the depreciation of the national currency during the reference period were the contagion of other currencies of emerging economies, such as the Brazilian real and the South rand. as well as the electoral process, Banco Base. The financial institution said that although the peso depreciated due to uncertainty about the future of NAFTA, the exchange rate performance was in the same direction and more pronounced than that observed during the other presidential elections.

In three previous presidential elections (2000, 2006 and 2012), the peso lost on average 4.96% in the second quarter, against a depreciation of 9.23% during the quarter.

In 2000, the peso it depreciated 3.4% against the dollar, while in 2006 the depreciation at the end of the month was only 0.06% , and that in 2012 the peso recorded a recovery of 7.06%.

As a result, the difference in quarterly observations, during the month of June, exchange rate movements were not consistent. During the month just ended, the peso posted a moderate appreciation of 0.26% or 5.2 cents, while it is trading around 19.86 pesos for a dollar.

In the last three presidential elections, the exchange rate months after the elections, the peso enjoying an average of 2.82%.

However, it is not excluded that the volatility of the exchange rate will continue during the second half of the year, due to the protectionism of the presidential administration. from the United States, Donald Trump, since the renegotiation of NAFTA is still pending.

Similarly, the imposition of new tariffs between this country and its major trading partners represents a serious risk to global economic growth, a risk that It is reflected first and foremost in the currencies of emerging economies such as than the Mexican peso.

In addition, volatility is expected to continue in the Mexican currency, a consequence of the contagion effect of the Brazilian real and the South African rand, depreciated by 17.18 and 15.83 % in the second quarter respectively.

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