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by The Mexican peso moved closer to 18.0 per USD, recovering from a fifteen-month low of 19 on June 12th. This rebound followed the post-election selloff and came amid expectations of a strict stance from the Bank of Mexico.
Mexico Inflation Rises to 4.78% in June
Inflation in Mexico was 4.78% in early June, slightly higher than the forecast of 4.7%. This aligns with Banxico’s commitment to keeping rates high to control inflation.
Mexican Economy Soars with 5.4% April Growth
Additionally, economic activity jumped 5.4% in April compared to the previous year, marking the fastest growth since August 2022. Stronger-than-expected retail sales and private spending highlighted the resilience of Mexican consumers despite high borrowing costs.
These factors supported the peso after concerns about policy changes by the Morena party led to a selloff in June, challenging institutional stability and Banxico’s inflation control efforts.
USDMXN Analysis – 26-June-2024
USDMXN Analysis – 26-June-2024
The USD/MXN pair has seen significant fluctuations recently, with the Mexican peso strengthening toward 18 per USD. This recovery from a fifteen-month low of 19 on June 12th indicates a positive market reaction to Mexico’s economic data and Banxico’s monetary policy stance.
Mexico’s inflation rate of 4.78% in early June surpassed expectations, supporting the Bank of Mexico’s decision to maintain restrictive interest rates. This approach aims to curb inflation effectively.
Additionally, a 5.4% year-over-year surge in economic activity in April, the sharpest since August 2022, coupled with robust retail sales and private spending, emphasizes the strength of the Mexican economy despite high borrowing costs. These positive economic indicators have bolstered the peso.
However, ongoing concerns about policy reforms proposed by the Morena party continue to pose risks. These reforms could impact institutional stability and Banxico’s inflation control measures, influencing future USD/MXN exchange rate movements.
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