Overview
The Mexican peso is currently weakening against the US dollar, as investors anticipate the Federal Reserve’s monetary policy decision. This situation is further influenced by recent GDP data releases for both Mexico and the United States.
Current Market Situation
As of the morning of this Wednesday, the Mexican peso has lost ground against the US dollar. The local currency is weakening due to a broader strengthening of the greenback, with traders awaiting the Federal Reserve’s policy decision later in the day.
- Spot exchange rate: The Mexican peso is currently trading at 18.7980 units per US dollar.
- Comparison to previous close: This represents a decrease of 4.71 centavos, or 0.25%, compared to the official closing rate of 18.7509 units per US dollar reported by Banco de México (Banxico) the previous day.
- Dollar price range: The US dollar is fluctuating between a high of 18.8370 Mexican pesos and a low of 18.7266 pesos.
- DXY Index advance: The Intercontinental Exchange’s Dollar Index (DXY), which compares the US dollar to six other currencies, has increased by 0.51% to 99.42 units.
Impact of Recent GDP Data
Investors are also processing the second-quarter GDP figures for both the United States and Mexico.
- Mexican GDP: Mexico’s economic growth accelerated to 0.7%, surpassing the expected rate of 0.4%.
- US GDP: The US economy expanded by 3.0%, exceeding the projected growth rate.
According to Monex, “The Mexican peso is being affected by the strengthening of the US dollar following the evaluation of the US GDP figures. This has completely offset the positive outcome of Mexico’s economy in the second quarter.”
Key Questions and Answers
- What is causing the Mexican peso to weaken? The primary reason for the peso’s decline is the broader strengthening of the US dollar, coupled with anticipation of the Federal Reserve’s monetary policy decision.
- How are recent GDP data affecting the Mexican peso? Despite a better-than-expected 0.7% growth rate for Mexico’s second quarter, the US dollar’s strength has overshadowed this positive development.
