Background on Key Figures and Relevance
The Mexican peso has experienced a slight decline against the US dollar at the beginning of this week. This currency fluctuation occurs in a market eagerly anticipating news regarding the ongoing trade negotiations between the United States and China, as well as the 20th day of the US government shutdown.
Market Performance and Dollar Trends
Mexican Peso Depreciation:
The Mexican peso weakened slightly, falling to 18.4111 units per dollar in the first trading session of the week, according to official data from Banco de México (Banxico). This represents a decrease of 2.12 centavos, or 0.12%, compared to the previous closing rate of 18.3899 units.
Dollar Movement:
The US dollar’s value fluctuated between a high of 18.4194 pesos and a low of 18.3526 pesos. Meanwhile, the Dollar Index (DXY), tracked by the Intercontinental Exchange, increased by 0.19% to 98.62 points when compared to a basket of six currencies.
Impact of US Government Shutdown
The ongoing US government shutdown has led to the suspension of official data releases. However, market participants hope that the inflation data for September will be published on Friday, which is crucial ahead of the Federal Reserve’s meeting on October 28th and 29th.
Trade Negotiations and Local Economic Indicators
Trade News Influence:
“Today, the main catalyst was the easing of tensions between the US and China, as officials are expected to meet in Malaysia,” explained Juan Carlos Cruz, founder of México Financiero. Market participants are closely monitoring trade-related developments.
Local Economic Indicators:
This week, Mexico will see the release of key economic activity (IGAE) and inflation figures, which will be vital in assessing market expectations regarding further interest rate cuts by Banco de México throughout the remainder of this year.
Technical Analysis and Future Outlook
Banco Base’s Technical Insights:
According to Banco Base, the room for the peso to weaken further is diminishing based on technical indicators. This suggests that the currency might enter a corrective phase, potentially reaching 18.70 pesos per dollar.
