Mexico’s peso briefly strengthened on Wednesday Sept. 21 after the U.S. Federal Reserve left interest rates unchanged but strongly signaled it could still tighten monetary policy by the end of this year as the labor market improves further.
The peso strengthened 0.6 percent to 19.7 pesos per dollar on the announcement, but reversed gains soon after, according to Reuters.
Earlier on Wednesday, Mexico’s finance minister said in a TV interview he expected the Fed’s decision to have some impact on the peso, which has weakened nearly 15 percent against the dollar this year.
Jose Antonio Meade said there is no decision yet on whether the government will intervene to stem the currency’s slide, but that there would be a meeting next week to evaluate it.
Mexico is committed to a freely floating exchange rate and generally refrains from more direct forms of intervention used by other emerging markets.
The country’s FX commission, made up of officials from the central bank and the finance ministry, began using rules-based auctions in late 2014, when a collapse in global oil prices sent the peso to a record low.
In February, however, with the exchange rate around 19.5 pesos per dollar, the central bank sold dollars directly to the market for the first time since 2009, abandoning the rules-based auction regime that Mexican authorities said had become predictable and exploited by market players.
Banamex said in an analyst note on Tuesday evening it now expects the Bank of Mexico to raise rates next week by 75 basis points as a result of the peso’s recent depreciation.
The peso has weakened around 5 percent this month on concerns that U.S. Republican candidate Donald Trump could win the Nov. 8 presidential election after polls showed him gaining ground against Democratic candidate Hillary Clinton.
more recommended stories
La Plancha, a historical opportunity for “La Blanca Mérida”
Residents of the neighborhoods near to.
Relatives of the 43 of Ayotzinapa face Mexico City police near Los Pinos
On April 24, relatives of the.
Judge bans Frida Kahlo’s Barbie doll to be sold in Mexico
A judge banned the sale in.
Mexico and Vietnam strengthen bilateral relationship
With more than 40 years of.
Mexico and the European Union reach a trade deal that virtually eliminates tariffs
CNN collaborator Jackie Wattles reports that the.
Yucatecan honey, a symbol of flavor and quality
Yucatan is the main producer and.
Profepa rescues jaguar without fangs or paws in Central Mexico
The Federal Prosecutor for Environmental Protection.
The Impact of President Trump on Re-emerging Markets
With his plans to build a.
Crime is prevented with education in Mérida, Yucatán
Municipal police will initiate a training.
On his 82nd birthday, Pope Francis gives out 3,000 ice creams to Rome’s poor and homeless
According to The Local Italia, Pope.