Background on Key Figures and Institutions
The Mexican Peso has shown strength against the US Dollar at the beginning of this Monday’s trading session. This reversal comes after the Dollar had fallen last week due to speculations of an interest rate cut in the United States. Jerome Powell, the President of the Federal Reserve (Fed), hinted at the possibility of an initial rate reduction during their September meeting, causing a significant drop in the Dollar.
Current Market Situation
Spot Exchange Rate: The Mexican Peso is currently trading at 18.5600 units per Dollar, marking a gain of 3.35 centavos or 0.18% compared to Friday’s close of 18.5935 units, according to the official data from Banco de México (Banxico).
Dollar Movement: The Dollar is fluctuating within a range of 18.6572 units (maximum) to 18.5850 units (minimum). The Intercontinental Exchange’s Dollar Index (DXY), which compares the US Dollar to six reference currencies, is up by 0.20% at 97.92 units.
Market Analysis and Expert Opinions
Following the Dollar’s slight recovery after last week’s substantial decline, traders are still assessing Jerome Powell’s statements. Although he suggested that interest rate cuts might be appropriate, his stance wasn’t overly accommodative regarding inflation risks, according to Banco Base’s report.
Despite the Dollar’s advance, technical factors dominate, pushing the Peso back into positive territory. Banorte expects the uptrend to persist, with the Peso breaking through 18.55, signaling a favorable outlook. The next significant resistance level for the Peso is 18.50.
Upcoming Economic Indicators
Traders are anticipating crucial figures this week. Notably, the US Federal Reserve’s preferred inflation measure, the Personal Consumption Expenditure (PCE), will be released on Friday. Meanwhile, locally, the week will be marked by Banxico’s quarterly report publication, also due this Friday.
Key Questions and Answers
- Q: Who is Jerome Powell, and why is he relevant? A. Jerome Powell is the President of the Federal Reserve (Fed) in the United States. His recent statements hinted at a potential interest rate cut, causing a significant drop in the Dollar.
- Q: What is the current exchange rate between the Mexican Peso and the US Dollar? A. The Mexican Peso is currently trading at 18.5600 units per Dollar, representing a gain of 0.18% compared to Friday’s close.
- Q: What factors are influencing the Dollar’s movement? A. The Dollar’s slight recovery is due to speculations of an interest rate cut in the US, as suggested by Jerome Powell. Additionally, technical factors are driving the Peso back into positive territory.
- Q: What economic indicators are expected this week? A. Traders are looking forward to the release of the US Federal Reserve’s preferred inflation measure, the PCE, and Banxico’s quarterly report publication in Mexico.
