Home Business Mexican peso remains flat against the U.S. dollar

Mexican peso remains flat against the U.S. dollar

by sanmigueltimes
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Mexico’s peso was flat against the dollar after figures showed annual inflation continued to moderate in April, fuelling hopes the Bank of Mexico’s monetary tightening cycle may be ending. Mexico’s annual inflation rate slowed for the third consecutive month, to 6.25%, according to the data.

“This means that another 25 basis point interest rate hike at next week’s Board meeting is no longer a certainty, but we think that a final increase in the policy rate is still more likely than not,” said Jason Tuvey, deputy chief emerging markets economist at Capital Economics, in a note.

Banxico, as the Mexican central bank is known locally, hiked the benchmark interest rate by 25 basis points to 11.25% in late March, moderating the pace of its tightening cycle and taking a more dovish tone on the future of rate moves.

Overall, the MSCI’s index for emerging market currencies slipped 0.4% by 10:00 am ET (1400 GMT) as the U.S. dollar strengthened with investors nervous ahead of inflation data this week and U.S. debt ceiling talks.

Weakness in commodity prices also weighed on currencies of the resources-heavy region, with oil and copper prices sliding after data from top consumer China suggested weak growth and demand.

San Miguel Times

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