Title: Mexican Peso Dips Against Dollar Amid Fed’s Monetary Policy Expectations
Date: [Insert Date]
The Mexican peso experienced a depreciation against the US dollar on Thursday, following its recent challenge of the 17-unit mark. The local currency closed with its weakest performance in over three weeks, as speculations about the Federal Reserve’s (Fed) intention to tighten monetary policy grew.
According to official data from Mexico’s central bank, the Bank of Mexico (Banxico), the exchange rate ended the day at 17.2375 units per dollar. This marks a loss of 22.34 cents or a 1.31 percent variation from its previous record of 17.0141 pesos.
Throughout the day, the peso traded between a high of 17.3833 units and a low of 16.9990 units against the dollar. The Dollar Index (DXY) of the Intercontinental Exchange, which measures the dollar against a basket of six major currencies, closed at 103.16 points—a 0.21 percent drop.
Monex Grupo Financiero noted that the Mexican currency was impacted by cautious sentiment in emerging markets, resulting from robust private sector job creation in the United States. Employment figures released by US payroll processor ADP suggested continued economic strength, further fueling expectations of tighter monetary policy by the Fed.
Minutes from the latest Federal Reserve meeting indicated that despite deciding to pause the rate hike cycle in the previous month, members of the Federal Open Market Committee anticipate additional rate hikes this year. This revelation contributed to the downward pressure on the Mexican peso.
Meanwhile, Banxico’s minutes revealed the central bank’s stance on maintaining the current target interest rate of 11.25 percent for an extended period to achieve the inflation target of 3 percent.
Industry operators are eagerly awaiting the release of US non-farm payroll data tomorrow, seeking clarity on the Fed’s future steps. The Mexican peso’s closing rate today represents its lowest level since June 12, almost a month ago.
For more information, contact [email protected].