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MEXICO CITY (APRO) – Mexico’s currency continued its weekly decline, closing at 19.1624 on Friday as the threat of a recession in the United States looms.
On August 2 this year, the peso exchange rate against the US dollar depreciated from a low of 18.8508 pesos to a high of 19.2221 pesos, depreciating for the third consecutive week, with a cumulative depreciation of 1.54 pesos, equivalent to 8.73%.
Moreover, this is the worst week since election day on June 2. According to data from the Bank of Mexico (Banxico), the Mexican currency was at 16.9682 pesos at the end of May, while today, the national currency remains above 18.90 pesos.
Risk aversion in international financial markets also intensified on Friday as the U.S. Department of Labor released a report saying the labor market slowed more than expected in July.
The data showed that the unemployment rate increased by 4.3% from June and was at its worst point since October 2021. These figures are worrying because they could foreshadow a recession in neighboring countries.
Sam’s Rule states that a recession begins when: “The three-month moving average of the national unemployment rate has increased by 0.50 percentage points or more relative to its lowest level over the past 12 months.”
It is important to remember that in Mexico, the date is approaching for the Federal Congress to discuss the reform of the judicial sector. This reform, promoted by the current President Andrés Manuel López Obrador, has influenced the volatility of the Mexican currency since he announced in September that he would continue to put pressure on it to be approved before the end of his six-year term.
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