Mexican Peso Edges Lower After Bank of Mexico Minutes
Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, gained 0.41% to 98.65.
Quick overview
- The Mexican peso slightly weakened against the dollar, closing at 18.7668 pesos per dollar.
- Investors are anticipating Federal Reserve Chair Jerome Powell's speech at the Jackson Hole symposium for insights on U.S. monetary policy.
- The Bank of Mexico's meeting minutes revealed a split among board members regarding future rate cuts amid inflation concerns.
- Upcoming domestic indicators for Mexico include mid-August inflation figures and Q2 GDP data, with retail sales showing a month-on-month decline.
The Mexican peso slipped slightly against the dollar on Thursday, as traders positioned for Friday’s speech by Federal Reserve Chair Jerome Powell at the Jackson Hole symposium.
Locally, investors also digested the release of the Bank of Mexico’s meeting minutes.
The exchange rate closed at 18.7668 pesos per dollar, compared to 18.7562 in the previous session, according to official Banxico figures. The move represented a marginal loss of 1.06 centavos, or 0.06%, for the peso.
The dollar traded within a range of 18.7308 to 18.8126 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, gained 0.41% to 98.65.
Banxico Outlook
The minutes revealed a split within the board: three members favored continuing with rate cuts, one expressed caution citing sticky goods inflation, and another preferred holding steady. Earlier this month, Banxico slowed the pace of easing with a 25 basis-point cut, and the minutes suggested further adjustments remain possible despite inflation concerns.
A Citi survey released Wednesday showed much of the market expects another 25 bp reduction in Banxico’s key rate at its next decision, scheduled for September 25.
U.S. Policy in Focus
Global markets are awaiting Powell’s remarks in Wyoming, which could provide clues on the Fed’s rate path. Minutes from the Fed’s latest policy meeting indicated growing support for a rate cut within the FOMC, as officials sought to prevent further labor market weakness.
On Thursday, U.S. data showed initial jobless claims rose by 11,000 to 235,000, the biggest increase since late May and above expectations for 225,000.
Key Data Ahead
For Mexico, attention turns to upcoming domestic indicators: mid-August inflation figures and Q2 GDP data, both due Friday. Earlier in the day, INEGI reported retail sales unexpectedly fell 0.4% month-on-month in July, though on an annual basis they rose 2.3%.
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