Peso depreciates after employment data in Mexico and manufacturing in the US

The domestic currency MXN= closed at 20.6190 per dollarwith a loss of 0.19% compared to the LSEG reference price on Thursday, although during the morning it momentarily appreciated by 0.27% to 20.5254 units.

“The peso weakened due to the rebound in local unemployment, which reinforces the vision of more interest rate cuts from Banco de México in 2025,” Monex Grupo Financiero said in an analysis note. “Towards overnight, we would expect the peso to fluctuate in a range between 20.50 and 20.73,” he added.

In December, the central bank lowered the funding rate by 25 basis points (bp) for the fifth time in 2024 and, in its monetary policy statement, opened the door to applying larger cuts throughout this year.

In an interview with Reuters in late December, Deputy Governor Jonathan Heath said the governing board could discuss a cut of up to 50 bp in its first decision of the year scheduled for February.

The benchmark S&P/BMV IPC .MXX stock index fell 1.62% to 48,957.24 points, although with a volume of 112.8 million shares traded, below the daily average of more than 200 million in recent months.

The shares of the tequila producer José Cuervo CUERVO.MX led the losses, with 4.85% less to 22.37 pesos, followed by those of the bottler and retailer FEMSA FEMSAUBD.MX, which subtracted 4.58% to 167.67 pesos.

In the secondary debt market, the yield on the 10-year bond MX10YT=RR rose seven basis points to 10.38%, while the 20-year rate MX20YT=RR rose two basis points to 10.61%.