Mexico City. The Mexican peso started Friday with a decline, in what is the third consecutive session of depreciation, due to a global rebound of the dollar after the Bank of Japan kept interest rates unchanged and expressed optimism about the direction of the economy.

The domestic currency is trading at 19.33 per dollar, with a depreciation of 0.20 percent against the reference price of Reuters Thursday, and is on track to end the week with a cumulative loss of 0.80 percent.

For now, all eyes were on comments from Philadelphia Fed chief Patrick Harker at a university conference in New Orleans later in the day after the U.S. central bank cut rates by half a percentage point on Wednesday.

The Mexican Stock Exchange (BMV) fell, interrupting a six-session winning streak, dragged down by an adjustment of positions in overseas markets after an aggressive rate cut by the Federal Reserve boosted investor sentiment.

The leading S&P/BMV IPC index .MXX fell 0.53 percent to 52,635.23 points in early trading on a day that was expected to be volatile due to the expiration of futures and options contracts on Wall Street.

It had accumulated a return of 1.2 percent this week.

Gold breaks the 2% barrier mil $600 per ounce

Gold broke above $2,600 for the first time, extending a rally driven by bets on further U.S. interest rate cuts and rising tensions in the Middle East.

Spot gold XAU= was up 0.7 percent at $2,605.50 an ounce by 1405 GMT, while U.S. futures GCcv1 were up 0.6 percent at $2,630.30. Silver XAG= was up 0.5 percent at $30.93.

Bullion’s rally was boosted after the Federal Reserve kicked off an aggressive easing cycle on Wednesday with a half-percentage point cut, boosting the appeal of non-interest-bearing gold.

Safe-haven asset prices have risen 26 percent in 2024, the biggest annual gain since 2010, as investors also sought to hedge against uncertainties caused by conflicts in the Middle East and elsewhere.

The record rally could be on the verge of a correction, analysts say.

“Clearly, there is still some buying activity associated with the Federal Reserve’s decision to start its easing cycle with a big cut,” said Daniel Ghali, commodity strategist at TD Securities.

Mexico City. The Mexican peso remains highly volatile, as it once again starts the session under pressure. The Mexican currency depreciated 0.18 percent at the opening of American markets this Thursday, trading at around 19.8216 pesos per dollar.

Amid confirmation that the European Central Bank (ECB) cut its interest rates by a quarter of a percentage point to 3.5 percent, the lowest level since June 2023, and that producer inflation in the United States was above expectations but remains consistent with the decline, the national currency is losing slightly against the dollar, after closing yesterday at 19.7935 pesos per spot dollar.

The dollar remains weak worldwide, according to its weighted index, which measures the performance of the US currency against a basket of six international currencies, falling 0.06 percent to 101.587 units.

Traders are also looking at the US producer inflation data. In Mexico, judicial reform has been approved by 18 local congresses.

The Bureau of Labor Statistics (BLS) released its producer price inflation (PPI) figures, which showed a monthly variation of 0.2 percent in August, slightly above the market consensus of 0.1 percent monthly and zero percent of the previous month.

Thus, in its annual variation, PPI inflation was 1.7 percent (previously it was 2.1 percent) and the underlying PPI was 3.3 percent, slightly above the previous 3.2 percent.

“Overall, US producer prices rose slightly more than expected in August amid higher service costs, but the trend remained consistent with declining inflation,” Intercam analysts explained.

Producer inflation in the United States is expected to be the last reading from the Federal Reserve (Fed) before its monetary policy meeting next week, which almost guarantees the start of a less restrictive policy.

Initial claims for unemployment insurance in the United States for the week ending September 7 stood at 230,000, which was an increase of 2,000 from the previous week of 228,000.

Risk appetite could be partly supported by the expectation that the Fed will begin to reduce the federal funds target on September 18. The Nasdaq is up 0.43 percent this morning, while the S&P 500 is up 0.22 percent.

The Mexican Stock Exchange (BMV), for its part, rose 0.46 percent to 51,426.71 points.

The lowering of economic alerts and the threat of hurricanes to the US oil industry trigger a rebound in oil prices. The Brent barrel has come off its lows and recovered to $71, gaining 1.66 percent to $71.80. The West Texas barrel, the benchmark in the United States, rebounds to $68, with an advance of 1.93 percent to $68.61.

Mexico City. At mid-day on Thursday, the Mexican peso extended its appreciation against the dollar. The Mexican currency has appreciated 0.97 percent against the US currency, trading at around 19.5934 units per dollar.

Amid confirmation that the European Central Bank (ECB) cut its interest rates by a quarter of a percentage point to 3.5 percent, the lowest level since June 2023, and that producer inflation in the United States was above expectations but remains consistent with the decline, the national currency started slightly lower against the dollar around $19.82. In Mexico, meanwhile, judicial reform has been approved by 18 local congresses.

The dollar remains weak worldwide, according to its weighted index, which measures the performance of the US currency against a basket of six international currencies, falling 0.14 percent to 101.517 units.

“The dollar is weakening against its main counterparts and against emerging market currencies, as the US producer price index readings for August were updated downwards, even though the September readings came out above expectations. With inflation falling in the United States, the markets have practically discounted an interest rate reduction of at least 0.25 percentage points and that puts pressure on the greenback,” said Alexander Londoño, analyst at ActivTrades, a multi-asset financial asset broker.

“The peso-dollar exchange rate is retreating downwards from the 20.13 zone and is approaching 19.50, where it could find support. Despite the downward retreat in the exchange rate, the medium-term upward trend is still maintained,” he predicts.

Producer inflation in the United States, which would be the last reading of the Federal Reserve (Fed) before its monetary policy meeting on September 18, almost guaranteeing the start of a less restrictive policy.

Initial claims for unemployment insurance in the United States for the week ending September 7 stood at 230,000, which was an increase of 2,000 from the previous week of 228,000.