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Markets Test Argentina’s FX Bands as U.S. Steps In; Mexico Nears USMCA Update Before APEC

Friday’s final trading session precedes APEC talks expected to decide steel and auto rules in the USMCA review.

Overview

  • The U.S. Treasury intensified support for Argentina this week, selling about US$500 million on Wednesday and more than US$1 billion across the week to cap the dollar near the official band’s ceiling, according to market reports.
  • The peso’s wholesale rate hovered just below the top of the band, after the Central Bank sold US$45.5 million on Tuesday, with traders focused on the last session before Sunday’s legislative elections.
  • Economy Minister Luis Caputo said “Monday nothing happens,” reaffirmed that the exchange-band regime will remain unchanged after the vote, and stated he is “more than comfortable” with a dollar near 1,500 pesos.
  • Coverage across outlets reports a financial backstop described as a line or swap of up to US$20 billion underpins the stabilization push, though analysts say confidence hinges on the election outcome.
  • Mexico’s Economy Secretary Marcelo Ebrard says roughly 90% of the USMCA negotiations are complete, with steel measures and automotive content rules still unresolved ahead of next week’s APEC meeting with USTR officials.