Introduction
The Mexican peso has shown a slight appreciation against the US dollar on this Monday morning. After three consecutive days of losses, the local currency regains some ground due to the weakening US dollar and anticipation of the Bank of Mexico’s (Banxico) decision later in the week.
Current Exchange Rate
The spot exchange rate is currently at 18.3717 pesos per dollar, representing a gain of 1.61 centavos or 0.09% compared to the official close on Friday at 18.3878 pesos, according to Banxico records.
Dollar Movement and DXY Index
The US dollar is trading within a range, with a high of 18.4320 pesos and a low of 18.3409 pesos. The Intercontinental Exchange’s Dollar Index (DXY), which measures the dollar against a basket of six reference currencies, has dropped by 0.15% to 97.49.
Market Sentiment and Upcoming Events
The peso’s recovery comes after a three-day losing streak, as the dollar weakens in the market while traders await comments from US Federal Reserve officials regarding future interest rate adjustments.
“There are no significant economic data releases expected in Mexico, but markets anticipate further comments from FOMC members in the US that could reinforce the narrative of a rate-cutting cycle,” said Felipe Mendoza, financial markets analyst at ATFX.
Local Factors
This week’s events will be dominated by the Banxico interest rate announcement. Market participants widely expect a 25-basis-point cut due to the weak economic performance and controlled inflation.
“Given this outlook, the Mexican peso faces a consolidation session. The immediate technical range is between 18.30 and 18.45, with support at the lower end if the global dollar falls following FOMC speeches and resistance at the upper end,” added Felipe Mendoza.
Key Questions and Answers
- What is the current exchange rate of the Mexican peso against the US dollar? The spot exchange rate is currently at 18.3717 pesos per dollar.
- Why is the Mexican peso gaining ground? The peso is recovering after three consecutive days of losses, partly due to the weakening US dollar and anticipation of the Bank of Mexico’s interest rate decision.
- What factors are influencing the market sentiment? Traders are awaiting comments from US Federal Reserve officials regarding future interest rate adjustments.
- What is expected from the upcoming Banxico interest rate announcement? Market participants widely expect a 25-basis-point cut due to the weak economic performance and controlled inflation.
