Peso deepens its losses after adjusting the outlook on sovereign debt

The Mexican currency was on track to register a monthly decline of around 9.0% in October, the most pronounced since November 2016.

The peso sank more than 2.0% on Wednesday after Fitch downgraded the outlook for Mexico’s credit rating to negative, while it was forecasting to record its worst monthly performance in October since November 2016.

The currency traded at 20.3994 per dollar with a loss of 1.73%, or 34.75 cents, compared to 20.0419 of the Reuters benchmark price on Tuesday.

At mid-session, moments after the Fitch report, whose publication occurs the same week in which the incoming government announced the cancellation of the NAIM project in Texcoco, the Mexican currency depreciated to 20.47 units, its weakest level of more than four months.

The agency said in its report that the decision to cancel the construction of the new airport sends a negative signal to investors.

Meanwhile, the Mexican agency HR Ratings reduced its outlook on the rating of Mexico’s sovereign debt from stable to negative on Tuesday.

The Mexican currency was on track to register a monthly decline of around 9.0% in October, the most pronounced since November 2016, when US President Donald Trump won the electoral victory in the United States.

In the year, the currency has accumulated a loss of 3.7%.

Source: Reuters, FORBES

The Mazatlan Post 

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