Mexican Peso Drops Amid Ongoing U.S. Government Shutdown
On Wednesday, data showed U.S. private employment unexpectedly declined last month, reinforcing expectations of rate cuts.
Quick overview
- The Mexican peso depreciated against the dollar, closing at 18.4252 pesos per dollar amid a U.S. government shutdown.
- The dollar strengthened, with the U.S. Dollar Index rising 0.15% to 97.90.
- The shutdown has delayed key economic data releases, including the nonfarm payrolls report, impacting market expectations.
- Traders are cautious following comments from the Dallas Fed President regarding inflation and potential rate cuts.
The Mexican peso fell against the dollar on Thursday as the greenback strengthened amid risk aversion triggered by the partial shutdown of the U.S. government.
The spot exchange rate closed at 18.4252 pesos per dollar, compared with 18.3686 in the previous session, according to official Bank of Mexico data. That marked a depreciation of 5.66 centavos, or 0.31%, for the local currency.
The dollar traded in a range between a high of 18.4697 pesos and a low of 18.3400. The U.S. Dollar Index (DXY), which tracks the greenback against six major peers, rose 0.15% to 97.90.
The U.S. government shutdown, which began at midnight Tuesday, threatens to delay the release of key economic data, including Friday’s highly anticipated nonfarm payrolls report, crucial for shaping the Federal Reserve’s next policy steps.
On Wednesday, data showed U.S. private employment unexpectedly declined last month, reinforcing expectations of rate cuts. However, Thursday’s weekly jobless claims report was not released due to the shutdown.
Meanwhile, traders also reacted to comments from Dallas Fed President Lorie Logan, who urged caution on additional rate cuts, warning that inflation remains above target and is trending higher.
The peso’s performance reflected a day of adjustment in currency markets, with the absence of significant macroeconomic data leaving the currency exposed to external factors and speculative moves.
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