Peso Advances for Third Consecutive Day Amid Dollar Weakness
The Mexican peso appreciated against the US dollar on Tuesday, advancing for a third consecutive day due to the weakening of the greenback. Meanwhile, traders are anticipating the release of crucial local inflation and GDP data scheduled for this week.
Key Currency Movements
- The exchange rate closed at 19.2757 pesos per dollar, marking a 4.41-centavo (0.23%) improvement compared to the previous day’s official rate of 19.3198 pesos per dollar, according to Banco de México (Banxico) data.
- The dollar’s price ranged from a high of 19.3314 pesos to a low of 19.2503 pesos.
- The Dollar Index (DXY), tracked by the Intercontinental Exchange, which measures the dollar against a basket of six reference currencies, fell 0.35% to 100.02 units.
US Concerns Weigh on Market Sentiment
The day’s trading was marked by appearances from US Federal Reserve officials in various public events. Among them, Raphael Bostic, president of the Fed of Atlanta, warned about potential price or employment changes due to tariffs.
Investors have shown increased nervousness about the world’s largest economy following Moody’s downgrade of the US government’s credit rating on Friday. Additionally, concerns arise from a tax-cutting bill in Congress.
Mexican Peso Awaits Local Data Release
The local currency has benefited from the dollar’s weakness, reaching a minimum level of 19.2503 pesos per dollar – its lowest since mid-October. Traders are gearing up to learn about crucial local GDP and inflation data, set to be published on Thursday.
José Curiel, Intercam’s foreign exchange specialist: “The peso is trading at its lowest level since October, testing our next support level at 19.25. A break below this level would push it to 19.15, the last hurdle before the 19-pesos barrier.”
Key Questions and Answers
- Q: What factors contributed to the Mexican peso’s appreciation against the US dollar?
A: The Mexican peso strengthened due to the weakening of the US dollar, supported by concerns over the US economy, including potential tariff impacts on prices and employment, as well as a credit rating downgrade by Moody’s and a tax-cutting bill in Congress.
- Q: What local data will influence the peso’s performance in the coming days?
A: Traders are eagerly awaiting the release of crucial local GDP and inflation data, scheduled to be published on Thursday.
- Q: What are the implications of the peso reaching its lowest level since mid-October?
A: The peso’s decline to its lowest level since mid-October indicates traders’ anticipation of further dollar weakness, with the next support level at 19.25 pesos per dollar.
