As the Mexican Peso is under pressure due to predictions of further rate cuts, USD/MXN may rise.
Amid ongoing worries about tensions in global trade, Banxico decided to lower interest rates by 25 basis points in September.
Strong economic data may impede the Fed's interest rate decreases, which would help the US dollar.
After two days of advances, the USD/MXN depreciates, closing Friday at about 18.50 in Asian time. The pair might, however, regain ground as the Mexican Peso (MXN) might have difficulties due to anticipations of additional rate cuts after the Bank of Mexico (Banxico) slashed rates by 25 basis points on Thursday, as was generally anticipated. Later on Friday, attention will turn to the Federal Reserve's favored inflation indicator, the Personal Consumption Expenditures (PCE) Price Index data.
Amid persistent worries about international trade tensions and slow economic development in the nation, the Banxico chose to lower its interest rate to 7.5%, the lowest level since May 2022. When deciding to reduce borrowing costs, the Mexican central bank said it took into account "poor economic growth" and unstable international trade policy.
Growing trade tensions between the two North American nations are highlighted by China's Commerce Ministry's Thursday commencement of an anti-dumping inquiry against pecan imports from the US and Mexico, according to Reuters.
Strong economic data could lead the US Federal Reserve (Fed) to take a more measured approach to lowering interest rates, which would strengthen the US dollar (USD). In the second quarter (Q2), the US Gross Domestic Product (GDP) Annualized rose 3.8%, above both the 3.3% estimate and the prior estimate. In contrast to the anticipated and prior 2.0% growth, the GDP Price Index increased 2.1% during the same time period. Last week, US initial jobless claims fell to 218K, the lowest level since July. The market anticipated 235K instead of the previous 232K.
Amid ongoing worries about tensions in global trade, Banxico decided to lower interest rates by 25 basis points in September.
Strong economic data may impede the Fed's interest rate decreases, which would help the US dollar.
After two days of advances, the USD/MXN depreciates, closing Friday at about 18.50 in Asian time. The pair might, however, regain ground as the Mexican Peso (MXN) might have difficulties due to anticipations of additional rate cuts after the Bank of Mexico (Banxico) slashed rates by 25 basis points on Thursday, as was generally anticipated. Later on Friday, attention will turn to the Federal Reserve's favored inflation indicator, the Personal Consumption Expenditures (PCE) Price Index data.
Amid persistent worries about international trade tensions and slow economic development in the nation, the Banxico chose to lower its interest rate to 7.5%, the lowest level since May 2022. When deciding to reduce borrowing costs, the Mexican central bank said it took into account "poor economic growth" and unstable international trade policy.
Growing trade tensions between the two North American nations are highlighted by China's Commerce Ministry's Thursday commencement of an anti-dumping inquiry against pecan imports from the US and Mexico, according to Reuters.
Strong economic data could lead the US Federal Reserve (Fed) to take a more measured approach to lowering interest rates, which would strengthen the US dollar (USD). In the second quarter (Q2), the US Gross Domestic Product (GDP) Annualized rose 3.8%, above both the 3.3% estimate and the prior estimate. In contrast to the anticipated and prior 2.0% growth, the GDP Price Index increased 2.1% during the same time period. Last week, US initial jobless claims fell to 218K, the lowest level since July. The market anticipated 235K instead of the previous 232K.
