Peso Hits 6-Week High vs Dollar

The Mexican peso appreciated slightly against the dollar this Wednesday. The local currency gained ground for a fifth consecutive session as the U.S. House of Representatives prepared to vote on a funding package that would end the government shutdown.

The spot exchange rate settled at 18.2977 units per dollar. Compared to a closing rate of 18.3150 units yesterday, according to official data from the Bank of Mexico (Banxico), this represents an improvement of 1.73 centavos, equivalent to 0.10 percent.

The price of the dollar moved within a range between a maximum of 18.3307 units and a minimum level of 18.2762, its best level in six weeks.

The U.S. Dollar Index (DXY) from Intercontinental Exchange, which compares the dollar to six major currencies, rose 0.14 percent to 99.62 units.

Following its approval in the Senate on Monday, the House of Representatives is preparing to vote on a funding package that would end the longest federal administration shutdown in U.S. history. The shutdown has now reached 42 days, halting government activities.

The reopening of the administration would resume, among other activities, the publication of official data, whose suspension has fueled uncertainty about the Federal Reserve's upcoming decisions. The Fed has cut rates by 25 basis points in each of the last two months.

"The Mexican peso shows a strong correlation with the most used emerging market currencies in carry trade strategies, due to the possibility that the reopening of federal agencies in the United States reinforces expectations of rate cuts," highlighted Monex Grupo Financiero.

While waiting for news, traders' attention will also be on the participation of various U.S. central bank authorities in public events, including John Williams, Anna Paulson, and Christopher Waller. Any mention of interest rates will be key.