US Economic Data Boosts Dollar, Weakens Mexican Peso
The Mexican peso depreciated against the US dollar on Thursday due to a stronger greenback, following positive retail sales data from the United States and a decline in jobless claims.
US Retail Sales and Jobless Claims
In June, US retail sales increased by 0.6% on a monthly basis and rose 3.5% year-over-year, surpassing the expected 0.2% and 0.3%, respectively. Excluding automobiles, retail sales grew by 0.5% in the previous month, also exceeding expectations of 0.3%.
Andrés Espinosa, business development manager at Excent Capital, commented: “While this is positive news for the US, President Donald Trump might feel uneasy. A robust economy and a strong dollar support the case for stable interest rates.”
Regarding labor market data, initial jobless claims indicated solid employment in the US, with 221,000 applications for the week ending July 12—a decrease of 7,000 from the previous week and lower than the forecasted 234,000.
Federal Reserve’s Stance on Interest Rates
During the session, Federal Reserve Board member Adriana Kugler stated that monetary authorities should not reduce interest rates “for some time” as trade tariffs start to reflect in inflation.
“Considering the current trend, we anticipate the exchange rate to remain within a range of fluctuation between 18.76 and 18.83 by day’s end,” Monex Grupo Financiero reported in an analysis report. “For overnight rates, we predict a range between 18.72 and 18.83.”
Key Questions and Answers
- What caused the Mexican peso to weaken against the US dollar? The strengthening of the US dollar, driven by positive retail sales data and a decline in jobless claims in the United States.
- What were the US retail sales figures for June? Retail sales increased by 0.6% on a monthly basis and rose 3.5% year-over-year.
- What were the jobless claims figures for the week ending July 12? There were 221,000 initial jobless claims, a decrease of 7,000 from the previous week and lower than the forecasted 234,000.
- What is the Federal Reserve’s stance on interest rates? Federal Reserve Board member Adriana Kugler suggested that monetary authorities should not reduce interest rates “for some time” due to trade tariffs impacting inflation.
