The foreign exchange market experienced notable fluctuations on December 26, 2024, as various currencies reacted to significant global economic pressures. Among these, the Mexican peso registered notable volatility against the US dollar, closing the day at approximately 20.21 pesos per dollar. This represented a change of 0.23% compared to the previous trading session when it was priced at 20.16 pesos. Over the past week, the peso has accumulated gains of 0.68%, yet it remains 18.29% higher year-on-year. The relative stabilization of the exchange rate stands out against the backdrop of prior declines, where the peso had faced significant challenges due to political factors and policies from the United States, particularly under President Donald Trump.
According to reports by Bloomberg, the volatility affecting the peso is not isolated. On the same day, similar losses were noted across 15 of the 16 major global currencies against the strength of the US dollar, driven by key economic indicators such as unemployment claims and bond auctions from the United States. Market analysts suggest these economic indicators may continue to exert downward pressure on currencies such as the Mexican peso, particularly as businesses and consumers approach the new year.
Meanwhile, the Colombian peso also saw fluctuations, closing on December 26 at 4,388.95 pesos per US dollar. The day marked an increase of 0.38% from the previous session, where it was pegged at 4,372.16 pesos. Over the past week, the Colombian currency appreciated by 0.28%, and its performance over the last year reflects growth of 10.76%. This recent uptick contrasts with the prior week's performance, where the peso saw declines. The Bank of the Republic of Colombia anticipates the exchange rate will stabilize at around 4,081 pesos per dollar by the end of 2024, influenced by local economic factors such as inflation trends and government reforms.
Inflationary trends also remain central to discussions about currency stability. For Colombia, projections indicate inflation will continue to decline to approximately 5.61% by year-end, which, though still high, is a marked improvement from prior peaks nearing 10%. Economic growth, on the other hand, lags, with growth expectations set at merely 1.2% for 2024.
Turning to the Canadian dollar, the US dollar was priced at 1.44 CAD on December 26. This rate reflected minimal variation at approximately 0.33% higher than the previous close, amid rising overall imports and exports as Canada emerges from COVID-19 impacts. Over the past year, the Canadian dollar maintains growth of around 6.65%. The Organization for Economic Cooperation and Development (OECD) has suggested Canada is on track for moderate growth following pandemic recovery, promising stability moving forward.
Chile's peso mirrored positive trends, closing at 988.90 pesos to the dollar, reflecting the volatility typical of holiday trading but still showcasing resilience amid economic forecasts predicting gradual recovery. Reports estimate the Chilean economy could see growth rates of 1.8% and 2.5% for 2024 and 2025, respectively, buoyed by rising wages and lower inflation, restoring consumer confidence.
Each country's economic climate contains unique challenges and trends. Mexico's peso began the year strong, at points reporting exchange rates as favorable as 16 pesos per dollar, embodying the “superpeso” phenomenon. Stability appears threatened by political developments and international relations, particularly concerning US policies affecting historical currency valuations. Similarly, Colombian and Chilean monetary trajectories are tightly linked to inflationary trends and broader regional challenges, including the impact of the global economy on trade and investment.
Overall, as fluctuations persist across the currency exchange board, these dynamics will shape financial decisions at both the individual and governmental levels as they navigate the uncertain waters of 2024. Analysts recommend close monitoring of the markets, especially for those preparing for international transactions or obligations, as the expected volatility could signal greater uncertainties heading toward year-end closures.
