Mexican Peso Rallies Against Dollar in Early Week Surge
Mexico’s consumer confidence index fell slightly in September, signaling a modest decline in optimism and potential slowdown in consumption.
Quick overview
- The Mexican peso strengthened against the U.S. dollar, closing at 18.3474 pesos per dollar amid a cautious market response to the U.S. government shutdown.
- The peso briefly tested resistance near 18.50 before settling lower, while the DXY Dollar Index rose by 0.39%.
- Mexico's consumer confidence index declined slightly in September, indicating potential challenges for private consumption.
- Mexican stock markets experienced significant losses, with the main index dropping 2.55% due to a steep decline in Grupo México shares.
The Mexican peso advanced against the U.S. dollar on Friday, climbing after briefly hitting a high near 18.50. The market continues to react cautiously to the ongoing U.S. federal government shutdown.
The exchange rate closed at 18.3474 pesos per dollar, up 4.61 cents or 0.25% from Thursday’s 18.3935, according to Banco de México (Banxico). The dollar traded between 18.3342 and 18.4900 pesos, while the DXY Dollar Index rose 0.39% to 98.10.
Shutdown Impact
The U.S. government shutdown, caused by a stalled budget agreement, has been in effect since Wednesday. President Donald Trump announced initial federal layoffs and blamed Democratic lawmakers for complicating a deal.
In early trading, the peso tested resistance near 18.50, touching 18.49 as it gained strength against the dollar. Traders await key economic releases this week, including Fed meeting minutes and delayed U.S. employment data.
Local Sentiment
Mexico’s consumer confidence index fell slightly in September, signaling a modest decline in optimism and potential slowdown in private consumption. Looking ahead, the peso may trade between 18.25 and 18.45, though cautious consumer sentiment and upcoming inflation data could trigger volatility.
Mexican Stocks Plummet
Meanwhile, Mexican stock markets suffered their second-worst day of the year, dragged down by a more than 15% drop in shares of mining giant Grupo México.
The S&P/BMV IPC, Mexico’s main stock index, fell 2.55% to 60,404.19 points, while the FTSE BIVA index dropped 2.47% to 1,210.16.
Looking ahead, the peso may trade between 18.25 and 18.45, though cautious consumer sentiment, the stock market slump, and upcoming inflation data could trigger further volatility.
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