Mexico peso and stocks stumble due to pandemic rebound and gloomy IMF projections

917

June 24, 2020

The peso closed the day at 22.75 per dollar, a loss of 1.51%; the BMV lost 0.81% due to fears for the future of the economy.

The peso and the Mexican Stock Exchange fell this Wednesday due to an increase in the cases of Covid-19 and after projections by the IMF that the economies of Latin America will suffer a deeper contraction this year than expected due to the coronavirus pandemic.

In the case of Mexico, the International Monetary Fund (IMF) estimated for 2020 a 10.5% economic decline, a drastic reduction compared to the expected fall of 6.6% in April.

The local currency traded at 22.75 per dollar near the end of the day, with a loss of 1.51%, compared to 22.4120 of the Reuters reference price on Tuesday.

“The exchange rate seems to be making a short-term convergence formation towards the 100-day moving average, currently around 22.35 pesos per dollar. This training suggests that in the following sessions there could be an upside break ”, mentioned a technical analysis by Banco Base.

Doubts about the economic recovery were fueled by reports showing that several U.S. states have seen a spike in infection records and that the death toll in Latin America exceeds 100,000, according to a Reuters count.

Locally, Mexico recorded a daily maximum of reported cases of coronavirus on Tuesday, with 6,288 infections, bringing the total number of infections to 191,410.

“Investors concerned that the rise in Covid-19 cases could delay or reverse the reopening of businesses,” Banorte said in a report.

Meanwhile, the benchmark S & P / BMV IPC index, made up of the shares of the 35 most liquid companies in the market, lost 0.81%, at 37,908.38 points, with a volume of 149.8 million of traded securities.

In the debt market, the yield on the 10-year bond rose five basis points to 6.01%, as did the 20-year rate that closed at 6.92%. 

Source: lta.reuters.com, forbes.com.mx

The Mazatlan Post