Chicago Mexican peso speculators cut positions for…

Mexico City – Mexican peso speculators on the Chicago Stock Exchange cut positions in favor of the currency’s appreciation. However, the attractive difference between interest rates between Mexico and the United States continues to favor the currency.

As of the end of July 21, Net speculative positions of the Mexican peso on the Chicago Mercantile Exchange They showed a slight decrease of 1,674 net long-term non-commercial contracts or 1.74% compared to the previous week. The stakes totaled 94,492 contracts, still extreme levels not seen since before the Covid-19 pandemic.

Contracts covering futures and options reached 94,492 long-term non-commercial contracts, which is a decrease of 1.74% or 1,674 non-commercial long-term contracts, according to Bloomberg data.

The data looks for the period from July 12 to 18 where it was Mexican pesos are valued 0.88% from $16.9013 to $16.7509 per dollar; While the index that measures the performance of the US currency showed a contraction of 0.57% to the lowest levels we have not seen in November 2022.

During the aforementioned period, the main catalysts were the expectation of US inflation data for June, which posted a slightly larger deceleration than expected by analysts. With this, the market increased the bets up by a quarter point and generated expectations that the Federal Reserve will not make changes in the remainder of the year to keep the interest rate in a range between 5.25% and 5.50%.

On July 21st Mexican peso closed today With a decrease of 0.68% to quote at $16.9996 per dollar. The decline in the currency comes due to investors’ caution in the absence of relevant economic information and waiting for the US Federal Reserve meeting next week.

Wait was born The volatility of the Mexican peso will increase for one month to 10.198% from 9.288% recorded last week. This week, the Mexican peso also hit a new year-over-year high of $16.6946 per dollar during the July 18 session.

“We see pressure on the spread with the Federal Reserve from 600 basis points coming in 2022 to 550 basis points. However, this will be more than offset by: higher GDP growth in Mexico;

The brokerage firm’s strategists estimate that, given the above factors, the Mexican peso will trade between $16.30 and $18.20 per unit during the second half of the year. However, the interest rate restriction between the Bank of Mexico and the Federal Reserve will lead to a moderate depreciation of the currency above $17.50 per US dollar.