In the face of the monetary policy announcement of the United States Federal Reserve (Fed) this Wednesday, the dollar loses value worldwide and hits its lowest level in the last two years, while gold is sold at the most expensive price in history.
Compared to the other six major currencies, the Euro, the Japanese Yen, the British Pound, the Canadian Dollar, the Swedish Krona and the Swiss Franc, the US currency reported a value of 93,718 units on Monday, being the lowest level of the past two years, according to the Bloomberg agency’s DXY index.
Market tensions have eased relative to the stress of the first half of the year, leading to a significant decrease in overall volatility, analysts at Banorte said.
In March, COVID-19 was declared a pandemic by the World Health Organization, while the Organization of the Petroleum Exporting Countries and Russia sparked a price war that led petro-prices to hit negative levels on April 20, for the first time in history.
The economic havoc and the uncertainty generated by these and other events allowed the dollar to gain ground against most of the world’s currencies, including the peso. However, the US currency has begun to weaken as market tensions ease.
This is due to optimism about the advances in treatments against COVID-19, the recovery of petro-prices due to the agreements reached between producers, the rebound in the stock markets due to the support packages unprecedented in Europe and some corporate results that have exceeded expectations, among other events.
In Mexico, the currency decreased 28 cents on Monday and ended up selling at 22.40 pesos at CitiBanamex windows, being its lowest price since March 13. In international negotiations, where most operations are carried out with the Mexican currency, the peso reported a gain of 26 cents or 1.2%, to end in 22.02 units, although it was listed in less than 22 for the first time in a month and a half. .
Given this, the Mexican peso became the third most appreciated currency this Monday, only behind the Brazilian real and the South African rand, according to Bloomberg.
From a technical point of view, the exchange rate of the peso against the dollar shows bearish signals, after piercing the support of 22.20 pesos (wholesale price) and may extend to 21.50 units, estimated Gabriela Siller, chief economist at Grupo Financiero Base .
As a result of the weakening of the dollar and the ample liquidity derived from accommodative policies, gold traded at $ 1,946 per ounce on Monday, its highest price in history, while silver traded at $ 24.60 and was its highest record since August 2013.
Market participants continue to perceive significant risks, such as renewed geopolitical tensions between the United States and China, and increased COVID-19 infections that have led to further restrictions in some countries.
“Gold rebounds amid fears of higher COVID-19 infections that have led to greater restrictions in some countries,” analysts at Banorte explain in their Financial Market Opening report released this morning.
During the week, investors will be on the lookout for negotiations on the new fiscal stimulus package in the American Union and the Fed’s monetary policy decision, as well as preliminary figures for the Gross Domestic Product for the second quarter in Mexico, the United States and the eurozone.