Background on the Mexican Peso and its Recent Performance
The Mexican peso has been strengthening against the US dollar for the third consecutive day, thanks to the weakening of the American currency. This development comes as investors closely monitor the United States’ trade negotiations and related economic news.
Current Exchange Rate and Dollar Movement
As of the morning of Tuesday, the spot exchange rate stands at 18.6270 pesos per dollar. Compared to the previous closing rate of 18.6617 pesos, according to Mexico’s central bank (Banxico), this represents a gain of 3.47 centavos, or 0.19%, for the peso.
The dollar’s price fluctuates within a range of 18.7008 pesos (maximum) to 18.6176 pesos (minimum). Meanwhile, the Dollar Index (DXY) from the Intercontinental Exchange, which compares the US dollar to six reference currencies, has dropped by -0.24% to 97.62 units.
Trade Policies and Economic Indicators
Market participants are eagerly awaiting updates on the US trade negotiations with its partners, as the deadline for their implementation approaches August 1st. In the meantime, trading activities focus on recently published economic data.
“Given the loss of confidence in US exceptionalism, the dollar has depreciated more than we anticipated. This has bolstered major currencies, including the peso, relative to the dollar,” according to an analysis report by Banamex experts.
“Today, the peso is being driven by positive local retail sales data, despite a weak performance from the IGAE index in May. Now, traders’ attention shifts to tomorrow’s inflation report for the first half of July,” Monex analysts noted.
For the remainder of the session, analysts from local Banco Base predict that the peso will trade within a range of 18.81 pesos (maximum) to 18.61 pesos (minimum) per dollar.
Key Questions and Answers
- What is driving the Mexican peso’s recent gains? The weakening US dollar and positive local economic data, such as retail sales, have contributed to the peso’s appreciation against the dollar.
- Why are investors closely monitoring US trade negotiations? These negotiations could impact global trade dynamics, and their outcomes may influence currency valuations and market confidence.
- What economic indicators are currently influencing the Mexican peso? Local retail sales data and upcoming inflation reports are key factors affecting the peso’s performance.
- What range do analysts predict for the peso-dollar exchange rate? Analysts from Banco Base expect the peso to trade between 18.81 and 18.61 pesos per dollar for the rest of the session.
