Mexican peso loses ground: dollar advances strongly in markets

The start of the week brought a reality check for the Mexican peso , which opened with losses against the dollar. After an optimistic close last week, investors decided to moderate their expectations after hearing the remarks of Federal Reserve Chairman Jerome Powell during the Jackson Hole Symposium.

The exchange rate stood at 18.60 pesos per dollar , reflecting a depreciation from Friday's levels. The optimism that had been generated by expectations of rate cuts is fading, giving way to a more cautious outlook.

The DXY index , which measures the dollar against six international currencies, rose 0.18% to 97.965. This strengthening comes amid a global context where the Federal Reserve maintains its cautious stance on inflation.

Meanwhile, global investors are adjusting their positions: European and Asian stock markets are mixed, and Wall Street opened with slight losses. The Nasdaq fell 0.40%, the S&P 500 0.24%, and the Dow Jones 0.16%.

In Mexico, the Mexican Stock Exchange's Price and Quotation Index (IPC) also felt the pressure. After reaching an all-time high last Friday, it fell 0.21% to 59,107 points.

The narrative in local markets combines euphoria and caution. On the one hand, the Mexican stock market celebrated the strength of some sectors; on the other, the peso shows vulnerability to a dollar strengthened by the Fed's monetary policy.

In Jackson Hole, Powell didn't talk about immediate interest rate cuts. His message was clear: inflation is not yet fully under control and caution is needed.

For Mexican investors, this meant the dollar would remain strong in the short term. A Monex analyst described it this way:

“The market was ready for a party, but Powell reminded us that it’s not time to toast yet.”

This week, eyes will be on three key factors:

1. Nvidia results that could set a trend in the technology sector.
2. Publication of the PCE index , the Fed's preferred indicator for measuring inflation.
3. Intel's move after announcing the US government's 10% stake.

Each of these elements could directly influence investors' risk appetite and, consequently, the direction of the Mexican peso.

Analysts agree that the exchange rate will remain volatile throughout the week, with an estimated range between 18.40 and 18.80 pesos per dollar . External factors, such as US inflation and employment data, will continue to set the tone.

The question remains whether the Mexican peso will be able to regain ground amid a scenario where the dollar appears to have the upper hand.