In 2024, financial coverage for retail or institutional investors such as Afores or investment funds will focus on the exchange rate (peso-dollar) and interest rates, predicts José Miguel de Dios, general director of the Mexican Derivatives Market (MexDer). This election year and interest rate movements will cause investors to use exchange rate and interest rate futures or options to cover their risks of shocks in the exchange rate, to pay for inputs, a loan or to protect an investment.
The volatility that will be generated by the elections in Mexico and the United States, as well as the start of the first decreases in the central banks’ reference rates will begin to generate volatility in investors’ portfolios. This will be a year of extreme volatility in the financial market, which raises the possibility of high fluctuations in the assets of retirement workers and retail investors, mainly due to the fact that there will be presidential elections in Mexico and the United States.
Meanwhile, amid greater liquidity and broader client participation, Mexican peso futures contracts on the Chicago Mercantile Exchange (CME) Group, the world’s leading derivatives market, reached a record average daily volume in 2023. The continued growth of the Mexican economy, combined with the current interest rate environment, is leading more clients to trade currency futures at CME Group. As client participation continues to increase, they are focused on creating and maintaining continued liquidity that will support the long-term development of electronic foreign exchange markets in Latin America. The Mexican peso ended 2023 as the best year in its history