Title: Peso Falls as Dollar Strengthens, Investors Await Fed’s Monetary Policy Decision
The Mexican peso experienced a decline on Thursday amidst an overall strengthening of the US dollar globally. Despite the dip, the peso continued to hover around its highest level in seven and a half years. Investors eagerly awaited the US Federal Reserve’s (Fed) upcoming monetary policy announcement, which would impact the currency’s performance further.
The peso traded at 16.7547 per dollar, reflecting a loss of 0.29% compared to Reuters’ reference price on Wednesday. Nevertheless, earlier this week, the peso reached 16.6884 units – a level unseen since December 2015.
Experts consider the current depreciation as a corrective phase rather than a significant concern due to the absence of significant economic indicators. Market participants anticipate the Fed’s monetary policy announcement scheduled for July 26 to guide their investment strategies.
Banco Base, a local firm, commented in their analysis note, “The depreciation can be considered an upward technical correction, in the absence of relevant economic indicators and while the market awaits the Fed’s monetary policy decision on July 26.”
Turning to local developments, investors shifted their attention to the forthcoming release of inflation figures, set to be unveiled next week. The inflation report was expected to provide additional insights for market participants.
For the remainder of the day, analysts at CI Banco forecasted the peso to fluctuate between 16.72 and 16.83 per dollar.
As the Mexican peso weakened against a strengthening US dollar, investors closely monitored the awaiting announcement of the US Federal Reserve’s monetary policy decision. With the peso still hovering near its highest level in more than seven years, market participants anticipated further market fluctuations driven by upcoming economic indicators and the Fed’s policy actions.