Tuesday, August 11, 2015

Dollar advanced 1.14% despite the Bank of Mexico auctions – The Economist

The spot dollar closed Tuesday at 16.3195 pesos, which means an increase of 1.14% compared to Monday’s close. The weight fell in line with foreign markets after China decided to devalue the yuan seeking support its growth.

The dollar closed this spot Tuesday at 16.3195 pesos, which means an increase of 1.14% compared to Monday’s close, according to data from the Bank of Mexico (Banxico).

The weight fell on Tuesday in line with external markets after China decided to devalue the yuan seeking support its growth, increasing concerns about the health of the world’s second largest economy

ARTICLE. Why China devalued the yuan and what will happen to Latin America?

The surprise move, which brought down the Chinese currency to its lowest level in more than two decades, dragged the peso to levels at which it was activated a dollar auction of the home central bank, while commodity-related securities were operating at a loss.

The dollar traded up to 16,342 pesos, with an advance of 1.13% or 18.20 cents, compared to 16.16 units Reuters reference price Monday before the auction of Banco de Mexico.

Analysts do not rule out new episodes of pressure on the Mexican peso this week with the release of economic indicators in the United States that could increase expectations about an early rate hike by the Federal Reserve.

It is the fifth time that the Exchange Commission activated the minimum price mechanism since it was reactivated in December 2014. In 2015, it has been activated four times: the March 6, 30 July and now August 5 August 11

Following the auction hours.

  • At 9: 00 hours, the central bank allocated 107 million dollars, 200 million offered at auction with a minimum price;
  • At 10:00 am placed 200 million at auction without reserve price, and
  • At 12:00 hours at auction sold 66 million with minimum price.

In the local debt market, the rate on the benchmark 10-year fell five basis point, to 6.03 percent.

With information from Reuters and Notimex

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