Fed’s hawkish position weakens peso to 56.86

(Photo by Mari Gimenez / Unsplash)

September 12, 2022

The peso exchange rate slightly weakened against the dollar by 0.04 or 0.1 percent to close at 56.86 on Monday on the latest hawkish pronouncement by the Federal Reserve.

The peso rate market opened at 56.85, before reaching a high of 56.87 and a low of 56.84.

“Still among the strongest for the peso in a week; after Federal Reserve Governor Christopher Waller signaled favoring another significant increase in interest rates [0.75 Fed rate hike] on 21 September 2022 [similar to St. Louis Fed President Bullard’s views],” chief economist Michael Ricaort told Daily Tribune.

“Ahead of the US inflation data, which is expected to ease from 8.5 percent in July 2022 [among the highest in more than 40 years or since December 1981], the global crude oil prices corrected higher but still among 7.5-month lows [Nymex at $86 per barrel levels], which could lead to a further rollback in local fuel pump prices,” he added.

Moreover, Ricafort said, “though the peso improved from the intraday weakest level of 57.07. The peso also slightly weakens after the lowest foreign direct investment data in 13 months.”

He said that continued gains in the local stock market today also tempered the peso’s weakness for the day.

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