Background on the Mexican Peso and its Recent Performance
The Mexican peso has shown resilience, appreciating against the US dollar on Tuesday morning. This comes as the market prepares for an upcoming monetary policy announcement from the Banco de México (Banxico) later in the week. Despite a global rise in the dollar, the local currency has managed to regain some ground.
Current Exchange Rate and Dollar Movement
The spot exchange rate currently stands at 18.8289 pesos per dollar, marking a gain of 7.80 centavos or 0.41% compared to the previous day’s closing rate of 18.9069 pesos, according to official data from Banxico.
The dollar’s value fluctuates between a high of 18.9481 pesos and a low of 18.8231 pesos. Meanwhile, the Dollar Index (DXY) by the Intercontinental Exchange, which compares the US dollar to a basket of six currencies, has increased by 0.18% to reach 98.93 units.
Market Expectations and Recent Developments
According to local financial firm Banco Base, “The Mexican peso begins this session with appreciation… However, the dollar is strengthening against most of its major crosses due to persistent nervousness over the US protectionist trade policy.”
Market participants anticipate further updates on US tariffs, which were implemented last Friday. In the meantime, they are keeping an eye on local inflation data and Banxico’s policy announcement scheduled for Thursday, with expectations of a 25-basis-point rate adjustment.
Local Factors Contributing to Peso’s Recovery
Some analysts attribute the peso’s recovery to domestic factors. Monex noted, “The peso trimmed some of its losses after assessing the local fixed investment report, although it remains affected by the dollar’s advance and the uncertain environment.”
Earlier today, the National Institute of Statistics and Geography (INEGI) reported that Mexico’s fixed investment grew by 0.9% on a monthly basis in May, following a 1.7% decline in the preceding month. On an annual basis, fixed investment decreased by 7.1%, down from a previous 12.5% decline.
Key Questions and Answers
- Q: What is the current state of the Mexican peso against the US dollar?
A: The Mexican peso has appreciated against the US dollar, with the spot exchange rate currently at 18.8289 pesos per dollar, marking a gain of 0.41% compared to the previous day.
- Q: What factors are contributing to the peso’s recent gains?
A: The peso’s recovery is attributed to local factors, such as the 0.9% monthly growth in fixed investment reported by INEGI, as well as anticipation of the Banco de México’s monetary policy announcement.
- Q: How are global events impacting the peso’s performance?
A: Despite a global rise in the US dollar, the Mexican peso has managed to regain ground due to local factors and market anticipation of policy changes from Banxico.
- Q: What are market participants watching closely?
A: Market participants are monitoring updates on US tariffs and local inflation data, as well as the upcoming Banco de México policy announcement expected to include a 25-basis-point rate adjustment.
