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US Dollar Strengthens Against Mexican Peso After Inflation Data Release

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US Dollar Strengthens Against Mexican Peso After Inflation Data Release

The Mexican peso lost ground against the US dollar after the markets opened this Wednesday, April 24. Today the data on inflation in the first half of April in Mexico was released and this mainly affected the value of the national currency.

According to information from Bloomberg, inflation in the country rose to 4.63 and the index is above expectations. This data reduces the probability of a possible interest rate cut at the next meeting of the Bank of Mexico.

After the stock market opening, the US dollar was paid at the start of sessions at 17.05 Mexican pesos on average, which implied a change of 0.55% compared to the 16.96 pesos of the previous session.

If we consider the data from the last week, the US dollar accumulates an increase of 0.44% although, on the contrary, in the last year it still maintains a decrease of 3.1%.

Compared to previous days, the tables turn with respect to the previous day, in which it marked a decrease of 0.21%, without being able to establish a defined trend in recent days. In reference to the volatility of the last week, it is slightly lower than the data achieved for the last year (9.92%), so its price is showing less changes than usual lately.

This week, the data on the Gross Domestic Product (GDP) for the first quarter in the United States is expected to be published. Investors are waiting for this index

Mexico’s economy has registered a series of contrasts, which will continue, according to the forecasts of the Bank of Mexico (Banxico) for 2024.

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Regarding the exchange rate, the central bank expects the dollar to trade throughout the year between 17.68 pesos and up to 18.67 pesos per unit. A conservative forecast considering that the national currency destroyed the 2023 forecasts, breaking the floor of 17 pesos per unit, which has not been seen for eight years.

For its part, inflation is expected to continue its downward trend, since it reached its historical maximum of 8.7% at the end of 2022. Banxico forecasts inflation of 4.02% in 2024, however, it is not expected to soon reach the ideal of three percentage points.

The above, however, contrasts with the growth forecasts for the Gross Domestic Product (GDP), since Banxico expects it to be 2.29% in 2024.

The Mexican peso is the fifteenth most traded currency in the world. (Banxico)

The Mexican peso is the legal tender of Mexico and is the first currency in the world to use the $ sign, which was later adopted by the United States for the dollar.

This currency is the fifteenth most traded currency in the world, as well as the most traded in Latin America and the third on the continent only behind the US and Canadian dollars.

Currently the abbreviation MXN is used to talk about the Mexican peso, but before 1993 the acronym MXP was used.

The coins normally used in Mexico are semicircular in shape and have the national coat of arms on the reverse. One Mexican peso is equivalent to 100 cents. There are coins of 1, 5, 10 and 20 pesos; while in bills there are 20, 50, 100, 200, 500 and 1,000 pesos.

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