Mexican Peso Declines at the Start of the Week as Dollar Strengthens
The Mexican peso depreciated against the U.S. dollar on Monday, pressured by the greenback’s strength as markets awaited key U.S. economic data later this week.
The exchange rate closed at 19.3953 pesos per dollar, compared to 19.2870 pesos last Friday, according to official data from the Bank of Mexico (Banxico). This represents a loss of 10.83 cents or 0.56% for the peso.
During the session, the dollar traded within a range of 19.2416 to 19.4015 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the currency’s performance against a basket of six major currencies, gained 0.32% to 103.22 points.
On the domestic front, sentiment among traders weakened following a report showing a decline in consumer confidence in Mexico last month. The peso gave back part of Friday’s gains due to weak consumer confidence and the dollar’s rise.
Recent U.S. economic data suggest that the Federal Reserve may slow the pace of future rate cuts after reducing borrowing costs by 50 basis points in September, which has bolstered the dollar’s strength.
Some analysts also pointed out that the dollar’s rally coincided with investors reassessing expectations following recent Chinese stimulus announcements that were viewed as underwhelming by markets.
Investors are now focused on U.S. retail sales and industrial production data for September, which will be released later this week. Additionally, markets will closely watch comments from Federal Reserve officials for further guidance.
The peso is expected to trade within a range of 19.15 to 19.60 pesos per dollar this week.
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