Overview of the Mexican Peso’s Recent Movement
The Mexican peso has experienced a slight decline against the US dollar on this Tuesday morning. The local currency is falling in a market that remains vigilant due to trade tensions between the United States and China, as well as the ongoing 21st day of the US federal government shutdown.
The spot exchange rate is currently at 18.4318 units per dollar, marking a decrease of 2.07 centavos or 0.11% compared to yesterday’s record of 18.4111 units, according to the official data from Banco de México (Banxico). The dollar’s movement places it within a range of 18.4887 units (maximum) to 18.3906 units (minimum).
The Intercontinental Exchange’s Dollar Index (DXY) has risen by 0.30% to 98.93 units, reflecting the strengthening of the US currency against its G10 peers.
Expert Analysis
Felipe Mendoza, an analyst at ATFX, stated, “The stability in opening reflects a technical pause after moderately volatile days. However, external and internal factors surrounding the market suggest that the peso may face mixed pressures during the session.”
Impact of US Government Shutdown
Market operators anticipate the release of September’s consumer price inflation data from the United States on Friday. The market has been operating without official references due to the partial US government shutdown, which has postponed labor indicators.
Monex Grupo Financiero explained, “Today, the peso is being pressured by the dollar’s advance… there is still caution regarding the partial government closure and trade uncertainty; in this context, we observe the dollar’s strengthening against its G10 peers.”
Mendoza from ATFX added, “If trade tensions escalate, the peso might lose ground towards the upper end of its range (18.30-18.50), but if dialogue expectations prevail and tariff benefits are consolidated, it could advance towards support.”
Local Economic Data
Regarding domestic matters, Mexico’s economic activity contracted by 0.6% in September compared to the same month last year, according to preliminary INEGI figures. In comparison to the previous month, the economy would have expanded by 0.1%.
These figures originate from the Indicador Oportuno de la Actividad Económica (IOAE), which estimates the economy’s performance before the release of the IGAE, expected tomorrow. The highlight for Thursday is the inflation data for the first half of October.
Key Questions and Answers
- Q: What is causing the recent movement in the Mexican peso? A: The peso is being pressured by the advancing US dollar amidst ongoing trade tensions between the United States and China, as well as uncertainty caused by the 21-day US federal government shutdown.
- Q: How has the US government shutdown affected market data? A: The partial closure of the US government has postponed the release of labor indicators, leaving the market without official references.
- Q: What are the expectations for the Mexican economy based on recent data? A: Preliminary INEGI figures show a 0.6% contraction in Mexico’s economic activity for September compared to the same period last year. However, there was a 0.1% expansion when compared to the previous month.
