Current Market Situation
The Mexican peso is practically stable against the US dollar in the early hours of this Thursday. The local currency shows minimal changes in its quotation, just before the Banco de México (Banxico) announces its monetary policy, where a rate cut is anticipated.
The spot exchange rate is currently at 18.5974 pesos per dollar, showing a slight variation of 0.04% compared to the previous day’s closing rate of 18.5904 pesos. This change represents a less-than-a-cent movement for the Mexican currency.
The dollar’s price fluctuates between a maximum of 18.6124 pesos and a minimum of 18.5582 pesos. The Intercontinental Exchange’s Dollar Index (DXY), which compares the US currency to six reference currencies, has decreased by 0.29% to 99.88 points.
Banxico’s Decision
Later today, Banxico will reveal its monetary policy decision, and the market anticipates a 25 basis points rate cut. This would be its twelfth reduction since the interest rate cycle began early last year.
“Today, the peso benefits from the dollar’s decline, allowing most emerging currencies to recover, while investors await Banxico’s policy announcement later this afternoon,” stated Monex Grupo Financiero in a note.
Recovery
The peso had surpassed the 18.70 level in previous sessions amidst bets on US interest rate cuts and increased risk aversion. However, private employment figures released in the United States yesterday stabilized the currency’s quotation.
“Breaking below the 100-day moving average at 18.60 would signal a more favorable outlook. In this context, the next resistance level is at 18.50, and support lies at 18.75. We recommend maintaining positions,” advised Análisis Banorte in a note.
Key Questions and Answers
- What is the current situation of the Mexican peso against the US dollar? The Mexican peso is trading stably against the US dollar, with minimal changes in its quotation before Banxico’s monetary policy announcement.
- What rate cut is expected from Banxico? The market anticipates a 25 basis points reduction in the reference rate, which would be Banxico’s twelfth adjustment since the interest rate cycle began early last year.
- How have recent events affected the peso’s quotation? The peso had previously surpassed 18.70 due to expectations of US interest rate cuts and heightened risk aversion, but private employment figures from the United States stabilized its quotation.
