Background on Felipe Mendoza and His Relevance
Felipe Mendoza, an analyst at ATFX LATAM, plays a crucial role in interpreting the financial market trends for Mexico. His insights are highly regarded, as he provides detailed analysis on the factors influencing currency fluctuations. In this particular scenario, Mendoza’s expertise sheds light on the recent depreciation of the Mexican peso against the US dollar.
Key Events Leading to Peso’s Depreciation
Fed’s Interest Rate Cut:
The Federal Reserve (Fed) of the United States recently reduced its benchmark interest rate by 25 basis points, bringing it down to a range of 4.00% – 4.25%. This move was in line with market expectations, as analysts had already factored this possibility into their forecasts.
Dollar’s Strengthening:
Following the Fed’s decision, the US dollar gained strength. This was due to positive economic data from the United States, such as favorable unemployment figures and a robust manufacturing production report. These developments created an unfavorable environment for the Mexican peso.
Impact on the Mexican Peso
The Mexican peso experienced a depreciation of 0.34% or 6.19 centavos against the US dollar, closing at 18.3805 pesos per dollar on Thursday according to Banco de México (Banxico). This marked the end of an eight-session winning streak for the peso against the greenback.
Market Outlook and Future Projections
Mendoza’s Analysis:
According to Felipe Mendoza, the Mexican peso remains tethered to the interest rate differential and the US dollar’s weakness. However, it continues to be sensitive to market news. Mendoza projects that the peso will fluctuate within a range of 18.20 to 18.60 pesos in the coming days.
Overnight Forecast:
Analysts from Monex anticipate that the peso will trade between 18.29 and 18.43 pesos overnight, influenced by the dollar’s trajectory and anticipation of Mexico’s offer and demand aggregate report, which will be released the following day.
Key Questions and Answers
- Q: What caused the Mexican peso to lose its winning streak against the US dollar?
A: The depreciation of the Mexican peso was primarily due to the Federal Reserve’s decision to cut interest rates by 25 basis points, which strengthened the US dollar. Additionally, positive economic data from the United States, such as favorable unemployment figures and a robust manufacturing production report, contributed to an unfavorable environment for the Mexican peso.
- Q: Who is Felipe Mendoza, and why is his analysis relevant?
A: Felipe Mendoza is an analyst at ATFX LATAM, a financial market analysis firm. His expertise in interpreting currency fluctuations makes his insights highly regarded, particularly in understanding the factors influencing the Mexican peso’s value against the US dollar.
- Q: What is the projected range for the Mexican peso in the coming days?
A: According to Felipe Mendoza, the Mexican peso is expected to oscillate within a range of 18.20 to 18.60 pesos in the near future.
