Overview and Background
The Mexican peso concluded the first trading day of the week with gains against a weakening US dollar. The local currency extended its winning streak for the seventh consecutive session, influenced by the release of US manufacturing activity data.
Market Performance
On September 15, the exchange rate ended at 18.3604 pesos per US dollar, according to official data from Banco de México (Banxico). This represents a gain of 8.79 centavos or 0.48% compared to the previous close of 18.4828 pesos on Friday.
US Dollar Index
The Intercontinental Exchange’s US Dollar Index (DXY), which measures the greenback against a basket of six currencies, fell by 0.19% to 96.960 points during Monday’s trading.
Market Analyst Insights
Antonio Di Giacomo, a financial markets analyst for Latin America at XS.com, told Reuters that the dollar’s weakness is linked to growing expectations of a rate cut by the Federal Reserve (Fed).
Local Market Developments
Markets will be closed on Tuesday for a public holiday commemorating the start of Mexico’s Independence.
Authorities from Mexico and China are expected to meet during the week to discuss a proposed increase in tariffs on Asian cars by Mexico.
US Manufacturing Data
The Empire State manufacturing survey, compiled by the US Federal Reserve Bank in the New York region, fell to 8.7 in September from 11.9 in August.
Market expectations, according to a Reuters survey, had the indicator at 5.
Fed Rate Expectations
Following the data release, the market anticipates that the Fed will start reducing interest rates in its upcoming statement on Wednesday, with a 25-basis point cut, after keeping rates in the range of 4.25% to 4.50% since late last year.
President Donald Trump urged the institution to implement a larger rate reduction.
This week, decisions by the Bank of England and the Bank of Japan will also be crucial.
Key Questions and Answers
- What is the current state of the Mexican peso against the US dollar? The Mexican peso closed with gains against a weakening US dollar, extending its winning streak for the seventh consecutive session.
- What factors influenced the Mexican peso’s performance? The local currency was influenced by the release of US manufacturing activity data.
- What is the current value of the US Dollar Index (DXY)? The US Dollar Index fell to 96.960 points.
- What are market expectations for the Federal Reserve’s interest rates? The market anticipates that the Fed will begin reducing interest rates, with a 25-basis point cut, following the release of US manufacturing data.
- What are the upcoming central bank decisions to watch? This week, pay attention to decisions from the Bank of England and the Bank of Japan.
