Overview of the Mexican Peso’s Recent Performance
The Mexican peso has been gaining ground against the US dollar this Thursday morning. The local currency advances as the greenback experiences a generalized weakening, while traders review US labor and trade figures along with local inflation data.
The spot exchange rate is currently at 19.5809 pesos per dollar, compared to yesterday’s official close of 19.6502 by the Bank of Mexico (Banxico). This translates to a gain of 6.93 centavos, or 0.35%, for the peso.
The dollar’s range is from a high of 19.6495 pesos to a low of 19.5611. The Dollar Index (DXY) from the Intercontinental Exchange, which measures the dollar against a basket of six reference currencies, has dropped by -0.57% to 99.34 units.
Economic Figures
According to the data, new US unemployment benefit applications increased last week as expected by analysts. Another report showed that durable goods orders rose in March above expectations.
On the local front, the INEGI reported that general inflation unexpectedly accelerated to 3.96% in the first half of April but remained within the official target range, leaving no changes to expectations that Banxico will continue lowering its key interest rate.
“Inflation figures for the first half of April were poorly affected by a rise in merchandise prices, particularly the non-food component. This may lead to some currency transfer to inflation,” noted Vector Casa de Bolsa.
China and US Trade Relations
Investors are closely watching news about the US-China trade relationship. Pekín announced that no ongoing trade talks with Washington are taking place, diminishing hopes for a relaxation in tensions.
The Chinese government clarified last night that no talks are being conducted with the US, and Ministry of Commerce spokesperson He Yadong added that “claims” about progress in bilateral talks should be disregarded.
“The peso benefits from the weakening US dollar as investors assess recent inflation figures in Mexico. The currency extends its weekly advance while remaining in a narrow range due to the lack of developments on the trade front,” explained Monex.
Key Questions and Answers
- Q: Why is the Mexican peso gaining against the US dollar? A: The Mexican peso is benefiting from the weakening US dollar, as traders review recent US labor and trade figures along with local inflation data.
- Q: What are the recent US economic figures? A: New US unemployment benefit applications increased last week as expected, and durable goods orders rose in March above expectations.
- Q: How is the inflation situation in Mexico? A: General inflation unexpectedly accelerated to 3.96% in the first half of April but remained within the official target range, leaving no changes to expectations that Banxico will continue lowering its key interest rate.
- Q: What is the status of US-China trade talks? A: Pekín announced that no ongoing trade talks with Washington are taking place, reducing hopes for a relaxation in tensions.
- Q: How is the Mexican peso performing in relation to these events? A: The Mexican peso has been gaining ground against the US dollar, extending its weekly advance while remaining in a narrow range due to the lack of developments on the trade front.
