Market participants gradually dismiss the risk of a broader conflict between Israel and Iran, and prices correct after losing all the year’s gains over five sessions.

The Mexican peso is trading with moderate gains this Wednesday morning. The local currency is advancing thanks to a better market sentiment, reclaiming some of the ground lost yesterday when it suffered its worst single-day drop since October.

The spot exchange rate is at a level of 16.9691 units per dollar. Compared to yesterday’s rate of 17.0465 units at the close of the Banco de México (Banxico), the peso is recovering 7.74 cents, equivalent to a 0.45 percent change.

The dollar price is trading in an open range with a high of 17.0950 pesos and a low of 16.8615 pesos. The Intercontinental Exchange’s Dollar Index (DXY), which measures the greenback against its reference currencies, was down 0.04% at 106.22 points.

Market participants are gradually dismissing the risk of a broader conflict between Israel and Iran, and the exchange rate is correcting after losing all the year’s gains over just five sessions, with a movement from a near nine-year low.

Meanwhile, traders continue to assess the outlook for Federal Reserve rate cuts after its chairman, Jerome Powell, said yesterday that due to persistent inflation, rates could remain elevated for longer.

Having briefly broken through the 17-per-dollar resistance, the parity is now slightly below, hovering around the level it started the year with. A range of 16.99 to 16.81 per dollar is expected, according to Banco Base.