Mexican Peso Slips as Dollar Surges Ahead of U.S.-China Deal Talks
The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.19% to 98.62 points.
Quick overview
- The Mexican peso declined against the U.S. dollar, closing at 18.4111 pesos per dollar amid ongoing U.S.-China trade negotiations and a prolonged U.S. government shutdown.
- The dollar experienced a slight increase, with the U.S. Dollar Index rising 0.19% to 98.62 points.
- Traders are optimistic about the upcoming September inflation report, which is crucial for the Federal Reserve's policy meeting later this month.
- Technical indicators suggest that the peso may be nearing a correction phase, potentially pushing the exchange rate towards 18.70 pesos per dollar.
The Mexican peso edged lower against the U.S. dollar in the first trading session of the week, as markets awaited updates on U.S.-China trade negotiations and developments surrounding the ongoing U.S. government shutdown, now in its 20th day.
The exchange rate closed at 18.4111 pesos per dollar, compared with 18.3899 in the previous session, according to data from the Bank of Mexico (Banxico). That represented a 2.12-cent loss for the local currency, equivalent to a 0.12% decline. During the session, the dollar traded between a high of 18.4194 and a low of 18.3526. The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.19% to 98.62 points.
The U.S. government shutdown has suspended the release of official economic data. Even so, traders are hopeful that Friday’s publication of the September inflation report will go ahead, as it will be a key input for the Federal Reserve’s policy meeting on October 28–29.
Meanwhile, investors remain focused on trade developments. Today’s main catalyst was the easing of tensions between the U.S. and China, with attention now turning to upcoming meetings between officials in Malaysia.
On the domestic front, the week will be defined by the release of economic activity (IGAE) and inflation data, both crucial for assessing whether Banxico will continue cutting interest rates through the remainder of the year.
From a technical perspective, the room for further peso appreciation is narrowing, according to technical indicators, suggesting that the exchange rate may be approaching a correction phase that could drive it toward the 18.70 pesos per dollar level.
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