Mexican Peso Weakens Against the Dollar as Economic Uncertainty Builds
Investors also remain focused on the release of U.S. economic indicators this week, looking for clues about the Federal Reserve’s policy.
Quick overview
- The U.S. Dollar Index (DXY) slipped 0.03% to settle at 99.56 after reversing early gains.
- The Mexican peso depreciated by 0.16% against the dollar, closing at 18.3390 pesos per dollar amid increased investor caution.
- Mexican stock markets experienced declines, with the S&P/BMV IPC falling 0.55% and the FTSE BIVA dropping 0.54%, marking four consecutive sessions of losses.
- Investors are awaiting key economic data releases from both Mexico and the U.S. later this week, including the Bank of Mexico's meeting minutes and third-quarter GDP.
The U.S. Dollar Index (DXY), which measures the greenback’s strength against a basket of major currencies, reversed its early gains and slipped 0.03%.
The Mexican peso weakened against the dollar on Tuesday, following the long holiday weekend in Mexico, amid heightened risk aversion among investors awaiting key economic data releases in both Mexico and the United States later this week.
According to data from the Bank of Mexico (Banxico), the exchange rate closed at 18.3390 pesos per dollar, representing a 0.16% depreciation, or 2.88 centavos, compared with Friday’s close.
Today, the exchange rate experienced a downward correction after having been pushed higher by low trading volumes during the holiday, as investor caution increases and risk appetite cools.
Meanwhile, the DXY reversed its early advance and slipped 0.03% to settle at 99.56.
Investors also remain focused on the release of U.S. economic indicators this week, looking for clues about the Federal Reserve’s next policy move.
For the overnight session, analysts expect the exchange rate to fluctuate between 18.30 and 18.43 pesos per dollar, considering the reactivation of Mexican markets, greater trading volume, and an empty economic calendar for Mexico tomorrow.
Mexican Stock Market
Mexican stock markets closed lower on Tuesday, following the long holiday weekend, as investors await new economic information from both Mexico and the United States.
The S&P/BMV IPC of the Mexican Stock Exchange (BMV) fell 0.55% to 61,984.45 points, while the FTSE BIVA of the Institutional Stock Exchange (Biva) dropped 0.54% to 1,235.37 units, according to final closing data.
With these results, both equity benchmarks recorded their fourth consecutive session of losses, something not seen since June.
On the domestic front, investors are awaiting Thursday’s release of minutes from the Bank of Mexico’s most recent meeting, as well as Friday’s publication of third-quarter GDP.
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