USD/MXN at two-day Low as Mexican Peso strengthens on sluggish US data
- Disappointing macroeconomic data releases from the US weigh on US Dollar.
- Fed’s Mester: Rates must peak above 5% and hold there for a while.
- Mexican Retail Sales missed estimates, according to INEGI, though
The Mexican Peso (MXN) gains ground vs. the US Dollar (USD) and hovers around the 18.0000 figure for the first time in two days. A deceleration in the US, namely the labor market, housing, and manufacturing activity, in Philadelphia, spurred concerns about the status of the economy. At the time of writing, the USD/MXN is trading at 17.9910.
USD/MXN drops as US data discouraged investors from buying US Dollars
Despite a dented market sentiment, the USD/MXN continues to dive. US Initial Jobless Claims for the latest week rose above expectations, signaling that the labor market is easing. At the same time, the Philadelphia Fed Manufacturing Index was reported, which plunged to -31.3 beneath March’s -23.3, a headwind for the American Dollar (USD).
The US housing market continues to deteriorate as Existing Home Sales dropped -2.4% MoM, from 13.8% in February, which appeared to signal that housing had bottomed.
Fed policymakers continued another round of appearances in the media, led by the Cleveland Fed President Loretta Mester. She commented that she is happy with the progress on inflation though she reiterated that it’s too high. She expects rates to be above 5%, adding that the US economy is headed for slow growth, which could turn into a recession.
Retail Sales fell far more than expected on the Mexican front, according to the national statistics agency known as INEGI. Figures on a monthly bases dropped 0.3% vs. estimates of 0.2%, while annually rose by 3.4%, beneath estimates of 4%.