The Mexican Peso Closes Lower Against the Dollar

Posted on December 30, 2024 by Ignacio Teson

On the final Monday of 2024, the Mexican peso ended the session with a loss against the U.S. dollar due to lower market activity amid year-end holidays, while investors remained focused on expectations for 2025 monetary policy.

The exchange rate closed at 20.6579 pesos per dollar, marking a depreciation of 1.67% compared to last Friday, according to data from the Bank of Mexico (Banxico). This movement represents a decline of 33.87 cents for the local currency.

[[USD/MXN-graph]]

As a result, the [[USD/MXN]] reached its highest level since November 26, when it stood at 20.6894 pesos per dollar.

The dollar traded within a range, with a maximum of 20.6600 pesos and a minimum of 20.4230 pesos. The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.1% to 108.07 points.

The Mexican Peso and Emerging Market Currencies

The peso continues to weaken against the dollar, influenced by Banxico’s monetary policy stance and its contrast with the U.S. Federal Reserve’s more restrictive expectations. The exchange rate remains in a narrow range due to low trading volumes during the year’s final days, with 61% of emerging market currencies losing ground against the dollar.

At the close of the session, the Mexican peso was the second most depreciated currency among emerging markets, following the Russian ruble, which lost 4.78%. Other notable depreciations include the Turkish lira (-0.72%), South African rand (-0.62%), Colombian peso (-0.60%), and Chilean peso (-0.26%).

Wall Street Plunges Sharply, Weighed Down by the Tech Sector

Posted on December 30, 2024 by Ignacio Teson

The three main Wall Street indices closed with significant losses on Friday, as a wave of market selling even took down the tech giants known as the “Magnificent Seven.”

Without any major economic data and with the famous Santa Claus Rally—historically known to boost stocks in the final five days of the year and the first two of the following—yet to materialize, investors chose to lock in profits.

The Dow Jones Industrial Average, which tracks 30 major companies, dropped 0.77% to 42,992.21 points. The S&P 500, composed of the market’s most valuable companies, fell 1.11% to 5,970.84 points. The Nasdaq slid 1.49% to 19,722.03 points.

[[SPX-graph]]

Main Movers

Among the major tech companies that have propelled Wall Street throughout the year, losses were widespread. Tesla shares were the most affected, dropping 4.95%, followed by Nvidia, the AI giant, which lost 2.09%.

Today, it seems there is considerable profit-taking across the board. We’ve seen more than two years of a strong bull market, so this isn’t surprising. Despite the sharp declines, the week ended positively for both tech stocks and the indices. The Dow Jones gained a modest 0.35% for the week, while the S&P 500 rose 0.67%, and the Nasdaq Composite increased by 0.76%.

Geopolitical Outlook

In major geopolitical news, the World Health Organization urged China to share COVID-19 origin data. The World Health Organization (WHO) has told China to share data on the origin of COVID-19, five years after the global pandemic that claimed millions of lives and devastated economies and healthcare systems.

“We continue to call on China to share data and provide access so we can understand the origins of COVID-19. This is both a moral and scientific imperative,” said the WHO.

Liberal Candidate Proposes ECB and Bundesbank Hold Bitcoin Reserves

Posted on December 30, 2024 by Ignacio Teson

Christian Lindner, FDP Leader, Follows Donald Trump’s Lead in the U.S., Urges Europe Not to Fall Behind. On risks, he argues that precious metals are also volatile.

The approach taken by elected U.S. President Donald Trump toward cryptocurrencies is now being mirrored in Europe. While Trump previously criticized Bitcoin, the leading cryptocurrency, he now advocates for a favorable policy toward it, with Republican allies pushing for the U.S. Federal Reserve to hold Bitcoin reserves.

Across the Atlantic, politicians like Christian Lindner, former German finance minister and leader of the liberal FDP party, are following suit.

During his time at the finance ministry, Lindner’s staunch opposition to increased public spending led to ongoing conflicts within Chancellor Olaf Scholz’s coalition government. The alliance between the Social Democrats, Greens, and Liberals collapsed due to these deep disagreements, leading to federal elections in February, where Lindner aims to assert his own position amid polls that suggest his party might struggle to gain parliamentary representation.

European Bitcoin Reserve Proposal

In this context, Lindner proposed that the European Central Bank (ECB) and its main shareholder, the Bundesbank, hold Bitcoin reserves. He justified the idea by pointing to what is happening in the U.S. “The new Trump administration is pursuing an extremely progressive policy on crypto assets like Bitcoin,” Lindner told media outlets. “Washington is even considering whether the U.S. Federal Reserve should include crypto assets in its reserves alongside currencies and gold.”

[[BTC/USD-graph]]

Lindner emphasized that both the ECB and Bundesbank are independent in their decisions but argued that Germany and Europe cannot afford to fall behind. “Frankfurt should consider whether crypto assets should be part of central bank reserves,” he said. He also suggested that this could help strengthen the resilience of reserves. “After all, crypto assets now represent a significant portion of global wealth growth,” he argued.

German Bitcoin Reserves Risks

When asked about the risks associated with cryptocurrencies, whose prices are known for extreme fluctuations, Lindner downplayed these dangers: “No one should invest everything in them. However, as a decentralized system where no one has exclusive power, the political risks are calculable. There are also fluctuations in traditional assets like precious metals.”

Nvidia Completes $700M Run:ai Acquisition

Posted on December 30, 2024 by Ignacio Teson

The European Union’s antitrust authority had initially warned that Nvidia’s acquisition of Israeli AI company Run:ai could threaten competition in the markets where both firms operate.

However, the European Commission gave unconditional approval in early December, concluding that the $700 million deal would not pose competition concerns.

Run:ai specializes in optimizing infrastructure for AI developers. The investigation had focused on whether the deal could strengthen Nvidia’s dominance in the market for GPUs, critical components often used in AI tasks. Nvidia controls roughly 80% of the GPU market for AI, making it a key player in the field.

The U.S. Department of Justice is also reviewing the acquisition over antitrust concerns, as reported by Politico in August. Regulatory scrutiny on both sides of the Atlantic has intensified over fears that tech giants’ acquisitions of startups could stifle potential rivals.

Run:ai plans to make its software open-source, which could broaden compatibility beyond Nvidia GPUs to support the entire AI ecosystem. The deal, first announced in April, marks another milestone in Nvidia’s expansion within the AI sector.

Nvidia Performance and Outlook

In 2024 alone, Nvidia’s stock skyrocketed an impressive 186%, driven by the explosive growth of the data processing market. The rise of artificial intelligence as a transformative phenomenon fueled this surge, marking a new era in technology.

[[NVDA/USD-graph]]

The democratization of AI usage has been one of the most significant technological advancements in recent years, reshaping industries and creating unprecedented demand for high-performance computing solutions.

Bitcoin at $92,000, Ending December Down 5%

Posted on December 30, 2024 by Ignacio Teson

Cryptocurrencies are facing losses of up to 6.4% on Monday, ahead of the New Year’s trading session, as the global strength of the U.S. dollar continues to pressure risk assets.

Bitcoin’s price dropped below $92,000, driven by the dollar’s resilience and concerns surrounding the upcoming inauguration of Donald Trump as U.S. President in late January.

[[BTC/USD-graph]]

Additionally, diminished expectations for Federal Reserve interest rate cuts have contributed to the recent decline in Bitcoin and other cryptocurrencies, which saw prices drop over the past month.

The traditional “Santa Claus rally,” typically seen in December, failed to materialize as [[BTC/USD]] recorded a 5% loss for the month. The cryptocurrency remains far below its all-time high of approximately $108,000, reached on December 17.

Ethereum has also slipped 1.75%, trading at $3,300, while altcoins are experiencing declines led by Cardano (-6.4%), Hedera (-6.1%), Polkadot (-5.7%), and Stellar (-5.6%).

Bitcoin Outlook and Projections

Market analysts predict “unprecedented volatility” and significant price movements in the coming weeks, which could reshape future expectations. Increased trading volumes reflect heightened market anticipation for profit-taking and risk hedging, suggesting a potential shift in trends.

This period may mark the beginning of a new era for the cryptocurrency market—one characterized by greater flexibility and innovation. Investors with clear and well-defined strategies are expected to seize the best opportunities in this evolving landscape.

U.S. Stocks Shake in Final Week of 2024

Posted on December 30, 2024 by Olumide Adesina

U.S. stock futures were marginally lower on Monday in anticipation of the final trading sessions of 2024. This week marks a light period for economic data because markets will be closed on Wednesday in honor of New Year’s Day. Data on pending U.S. home sales and the Chicago PMI are due today

The S&P 500 and the Dow Jones Industrial Average futures were also down in the London trading session. Nasdaq-100 futures stayed relatively unchanged.

The major averages are ending the year just short of record highs with Nasdaq, Dow, and S&P 500 up more than 31%, 14%, and 25% respectively, and on track for the best year since 2021.

The benchmarks are also expected to have a successful fourth quarter, as the Nasdaq is on track to record its longest winning streak since the second quarter of 2021. A Santa Claus rally is what investors hope will happen as stocks continue to rise into the end of the year and the beginning of the next one.

Meanwhile, the European markets began the day with a slight decline in the last full trading day of 2024. European markets will close early on Tuesday for New Year’s Eve. , will also be closed on Wednesday for the New Year’s Day holiday.

U.S Dollar Index Shows 6.6% Gain In 2024

Posted on December 28, 2024 by Olumide Adesina

The dollar index, which compares the greenback’s strength to six major currencies, showed a 6.6 percent gain in 2024 after easing 0.06 percent on Friday.

The USD/Yen was still close to Tuesday’s 5-1/2-month high Although it was down by 6 basis points. In comparison. the greenback gained 53.4 percent this month against the struggling Japanese yen and nearly 12 percent for 2024.

Indicators point higher and closer to overbought levels as the Dollar Index continues its bullish momentum. The DXY continues to creep higher near 108 index points amid low market liquidity, indicating ongoing buying interest. The technical picture stays positive if the DXY index is above 106 index points.

The Japanese Yen suffered because the BoJ decided against raising interest rates this month.

The statement by Governor Kazuo Ueda that he would rather wait for clarity on Trump’s policies highlights growing anxiety among U.S. central banks globally. S. . tariffs affecting international trade. Jerome Powell, the Fed’s chair, stated earlier this month that Central bank officials “are going to be cautious about further cuts.”.

Donald Trump has also had an impact on the economy. His proposed deregulation, tax cuts, tariff hikes, and stricter immigration laws are seen by economists as both inflationary and pro-growth.

Conversely, traders expect the European Central Bank to implement additional rate cuts and the Bank of Japan to maintain its loose monetary policy settings, which can be positive for their respective currencies. The escalating anticipations of higher U.S. interest rates propelled the 10-year Treasury yield to its peak since early May, initially reaching 4.641% on Thursday.

Donald Trump Requests Supreme Court Postpone TikTok Ban

Posted on December 28, 2024 by Olumide Adesina

President-elect Donald Trump requested that the Supreme Court postpone an enforcement rule that would outlaw TikTok in the United States on Jan. 19 if the Chinese parent company does not sell the app. The U.S. apex court is scheduled to hear arguments in the case on January 10.

D. John Sauer, Trump’s attorney and the president-elect’s choice for U.S. solicitor general wrote, “President Trump takes no position on the underlying merits of this dispute.” This will allow President Trump’s incoming Administration to attempt a political settlement of the case’s issues.

The Protecting Americans from Foreign Adversary Controlled Applications Act, a bipartisan bill passed by Congress and signed into law by President Joe Biden in April, is the law at the center of the lawsuit.

The court expedited the briefing and oral argument schedule after deciding to hear the case earlier this month. Nevertheless, the court denied TikTok’s request to halt the ban’s implementation, giving it only nine days following oral arguments to either issue an opinion or permanently block the law. Trump—who attempted to ban TikTok in 2020 but was blocked by the courts—said he could enact a political solution before the court’s decision.

The Justice Department and TikTok also filed briefs in the case, primarily restating their arguments before the U.S District of Columbia Circuit Court of Appeals.

The government’s national security arguments for prohibiting the app, such as worries that the Chinese government might obtain user data and alter app content, were deemed valid by the court, which upheld the law.

The Chinese government denied claims that TikTok is a security risk to the world’s largest economy. The Justice Department defended the law in its Friday court filing citing national security concerns that the Chinese government might exert influence over the company. TikTok argued in its brief against the law, claiming that a ban on the app would infringe upon First Amendment rights to free speech.

European Markets Close with Gains

Posted on December 27, 2024 by Ignacio Teson

European equities returned to trading with positive performances following a two-day break for Christmas, Boxing Day, and St. Stephen’s Day (in Spain). Financial sector gains dominated the session as major indices posted advances.

Germany’s DAX index rose 0.55% to 19,958.63 points, while France’s CAC 40 climbed 1% to 7,355.37 points. Spain’s Ibex 35 also gained 0.45%, closing at 11,525.30 points.

The pan-European Stoxx 600 index closed 0.67% higher at 507.18 points, marking its highest level in a week and advancing nearly 1% for the week. Trading volumes remained below average due to the holiday period.

[[DAX-graph]]

The automotive sector led gains with a 1.40% rise, while the healthcare sector added nearly 1%, buoyed by a 2.1% increase in Novo Nordisk shares, contributing significantly to the broader index’s performance.

Main World Movers

Outside the Eurozone, London’s FTSE 100 posted a modest gain of 0.16%, closing at 8,149.78 points. Among its top performers were Vistry Group, Centrica, and Diageo. The FTSE 100 advanced 0.81% for the week, recovering from two consecutive declines.

Meanwhile in America, the three main Wall Street indices are retreating on Friday morning. The stock averages are posting sharp declines, with the tech-heavy Nasdaq leading the losses and erasing its gains accumulated during this shortened trading week.

The Dow Jones Industrial Average, comprising 30 corporate giants, is down 0.94%, trading at 42,917.62 points. Meanwhile, the S&P 500 has dropped 1.35% to 5,956.28 points, and the Nasdaq Composite, heavily weighted toward technology, is sliding 1.99% to 19,621.45 points.

Mexican Peso Weakens, Ends the Week on a Negative Note

Posted on December 27, 2024 by Ignacio Teson

The Mexican peso depreciated against the dollar during Friday’s trading session. With no significant economic data to guide markets, the local currency fell in a volatile session with reduced trading volume, mirroring the performance of its regional peers and closing a negative week.

The exchange rate ended the day at 20.3192 pesos per dollar, compared to Thursday’s official rate of 20.2083 pesos, according to data from the Bank of Mexico (Banxico). This represented a loss of 11.09 cents or 0.55% for the peso.

[[USD/MXN-graph]]

Throughout the session, the dollar traded within a range of 20.4065 pesos at its highest and 20.1957 pesos at its lowest. Meanwhile, the U.S. Dollar Index (DXY), which tracks the greenback’s performance against a basket of six major currencies, edged down 0.09% to 108.03 points.

Analysts noted that, in the absence of economic indicators providing insight into the Federal Reserve’s interest rate trajectory, markets are closely monitoring developments in the Middle East following Israel’s strikes on targets in Yemen.

For the week, the peso recorded a sharp loss. From an official closing rate of 20.0342 pesos per dollar last Friday, the currency depreciated by 28.50 cents, or 1.42%, marking a challenging week for the Mexican peso.

Meanwhile, in Europe, the DAX index of the Frankfurt Stock Exchange in Germany rose 0.55% to 19,958.63 points, while France’s CAC 40 in Paris gained 1% to close at 7,355.37 points. Spain’s Ibex 35 index in Madrid advanced 0.45%, ending the session at 11,525.30 points.