Title: Mexican Peso Hits Lowest Level in Nearly Four Years, Reverses Losses
The Mexican peso experienced a reversal of fortunes on Friday as it reached a new low not seen since December 2015. The exchange rate, which crossed the line of 17.8000 units per dollar, is currently located at 16.7589 units.
Initially, the currency suffered a slight decline earlier in the day due to a rise in the value of the greenback. However, optimism within the market, fueled by lower inflation rates and solid reports on US bank performance in the second quarter, helped the peso regain its strength.
In comparison to yesterday’s official close at 16.8391 units, the peso has gained 8.02 cents or 0.48 percent. Over the course of the week, the currency has seen an accumulated gain of 38.55 cents or 2.25 percent, starting from its official record of 17.1444 pesos last Friday.
The Dollar Index (DXY), which measures the greenback against the other six G7 currencies, has also seen a slowdown in its rally. It currently stands at 99.92 points, reflecting a 0.15% increase. However, this rise outlines a weekly fall of 2.31%, marking the worst performance in eight months.
The recent release of the new consumer and producer inflation reports for June in the United States contributed to the moderation of the dollar’s rally. With declines in both data, there is now growing speculation over an early end to price rises and potential changes in Federal Reserve interest rates.
According to CME Group’s Fed Watch tool, US interest rate futures indicate a 95% probability of a 25 basis hike to the Federal Reserve’s benchmark rate at its July 26th meeting.
However, the tool also shows that the maximum probability traders see for an additional rate increase this year is only at 28% in November. According to Fed Watch, the final rate for the cycle would fall between 5.50% and 5.75 percent.
This article can be attributed to Jose Rivera at [email protected].