Background on the Mexican Peso and US Dollar
The Mexican peso has appreciated against the US dollar this Thursday morning. The local currency advances as the greenback weakens following the release of first-quarter GDP figures that showed the United States’ economy contracted less than expected.
Economic Data and Market Reaction
The spot exchange rate is currently at 19.3503 pesos per dollar, marking an increase of 6.42 centavos or 0.33% compared to the previous day’s closing rate of 19.4145 pesos, according to data from Mexico’s central bank, Banxico. The US dollar’s movement ranges between a high of 19.4189 pesos and a low of 19.3096 pesos.
The Intercontinental Exchange’s Dollar Index (DXY) fell 0.39% to 99.51 units, reflecting the weakened status of the US currency when compared to a basket of six currencies.
The Commerce Department’s data revealed that the United States’ Gross Domestic Product (GDP) contracted by 0.2% in the first quarter, adjusted for seasonality, which is less than the initial estimate of 0.3% and below market expectations of 0.4%
Court Ruling and Its Impact
Adding to the positive sentiment, the U.S. International Trade Commission ruled yesterday that President Donald Trump overstepped his authority by imposing “reciprocal” tariffs and ordered the annulment of the contested tariff orders.
Focus on Banxico’s Policy Meeting Minutes
In local news, market participants are eagerly awaiting the release of minutes from the latest monetary policy meeting by Banco de México, where the bank’s governing board reduced the benchmark interest rate by 50 basis points to 8.5%.
Key Questions and Answers
- What caused the Mexican peso to appreciate against the US dollar? The peso gained strength due to weakening of the US dollar following better-than-expected first-quarter GDP data from the United States.
- What is the current spot exchange rate between the Mexican peso and US dollar? The spot exchange rate is currently at 19.3503 pesos per dollar.
- How did the US GDP perform in the first quarter? The US GDP contracted by 0.2% (adjusted for seasonality) in the first quarter, which was better than the initial estimate of 0.3% and market expectations of 0.4%.
- What court ruling impacted the US-Mexico trade relations? The U.S. International Trade Commission ruled that President Donald Trump overstepped his authority by imposing “reciprocal” tariffs, leading to the annulment of contested tariff orders.
- What is the focus of market participants in Mexico? Market participants are eagerly awaiting the release of minutes from Banco de México’s latest monetary policy meeting, where the bank reduced its benchmark interest rate by 50 basis points to 8.5%.
