Mexican Peso Recovers After Breaching the 20-per-Dollar Threshold
In recent days, the peso has faced downward pressure, hovering near the key 20-per-dollar mark.
The Mexican peso showed a modest recovery on Tuesday, advancing slightly after two consecutive sessions of losses that briefly pushed it beyond the psychological barrier of 20 pesos per U.S. dollar.
The exchange rate closed at 19.9478 pesos per dollar, compared to 19.9758 in the previous session, according to official data from the Bank of Mexico (Banxico). This represented a small gain of 2.80 cents, or 0.14%. During the session, the dollar fluctuated between a high of 19.9949 and a low of 19.7687 pesos. Meanwhile, the U.S. Dollar Index (DXY), which tracks the dollar against six major currencies, edged up 0.07% to 104.08 points.
Despite the peso’s appreciation, analysts note that the currency remains in an upward trend, reflecting concerns over the potential impact of the upcoming U.S. elections on the Mexican economy. The possibility of Donald Trump, known for his protectionist stance, winning the November election has weighed on the peso.
In recent days, the peso has faced downward pressure, hovering near the key 20-per-dollar mark. This depreciation comes amid adjustments in exchange rates as investors factor in political risks tied to U.S. elections and shifting expectations for Federal Reserve policy. Long-term U.S. bond yields have risen, driven by uncertainty over future interest rate decisions, despite Fed members signaling a more cautious stance.
Adding to market pressure, recent Mexican economic data showed weakness. The Global Indicator of Economic Activity (IGAE) contracted by 0.3% in August compared to the previous month, due to declines in both primary and secondary activities.
Looking ahead, markets will remain focused on developments in the U.S. elections and monetary policy announcements. In Mexico, investors are awaiting August retail sales data, which could offer further insights into local economic trends and influence the central bank’s interest rate decisions.
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