Puerto Vallarta, Mexico – The Mexican peso strengthened against the U.S. dollar on Friday morning, October 4, buoyed by positive labor market data from the United States. As of 6:52 a.m., the exchange rate stood at $19.33 Mexican pesos per dollar in the spot market, reflecting an appreciation of 0.11% compared to Thursday’s close. This marks a continuation of the peso’s recent trend, driven by both domestic and international economic factors.
The peso’s gains occurred despite a general strengthening of the U.S. dollar. According to the Dollar Index, which measures the U.S. currency’s performance against a basket of other major currencies, the dollar rose by 0.52% this morning, suggesting resilience amid positive economic indicators.
U.S. Labor Market Surpasses Expectations
The U.S. reported robust job growth in its latest labor market data, showing non-agricultural payrolls increasing by 254,000 in August. This figure not only exceeds August’s numbers but also surpasses market expectations. Additionally, the unemployment rate in the United States dropped to 4.1%, a decline of 0.1 percentage points from the previous month, reflecting continued strength in the labor market.
Mexican Employment Data Shows a Slight Rise in Unemployment
In contrast, Mexico’s labor data presented a different picture. According to the National Institute of Statistics and Geography (Inegi), the unemployment rate in Mexico was reported at 3.0% in August, marking a slight increase of 0.1 percentage points from July. This represents the third consecutive month of rising unemployment in the country, raising concerns among economists regarding the trajectory of the Mexican labor market.
Peso Outperforms Major Currencies
Despite this slight uptick in unemployment, the Mexican peso demonstrated resilience against the U.S. dollar, outperforming the other 15 major global currencies tracked by Bloomberg. Currencies such as the South Korean won, Japanese yen, and New Zealand dollar experienced losses of 1.97%, 1.17%, and 0.92%, respectively, as they were hit by the strengthening dollar.
Analysts from Monex attributed the peso’s performance to sustained momentum from a recent appreciation rally and the positive impact of remittances. “We could say that the peso was driven by the continuation of the recent appreciation rally and the strength of local remittances,” Monex analysts wrote in a note released at market close on Thursday.
Exchange Rates at Major Mexican Banks
As of this morning, Bloomberg Line reviewed the U.S. dollar’s exchange rate at several major Mexican banks, showing slight variations across institutions. The rates were as follows:
- Citibanamex: $19.85 MXN
- Banco Azteca: $19.80 MXN
- BBVA Mexico: $19.62 MXN
- Banorte: $19.65 MXN
Additionally, the Official Gazette of the Federation (DOF) published the official exchange rate for Friday, October 4, at $19.4678 MXN per dollar.
Outlook
The Mexican peso’s gains, in contrast to the strength of the U.S. dollar, illustrate the unique dynamics at play within the Mexican economy and its labor market. While the peso’s appreciation offers a positive signal, the rise in unemployment may indicate underlying economic challenges. Investors and analysts alike will likely keep a close watch on upcoming data releases to assess the peso’s longer-term prospects and the health of Mexico’s labor market.
Puerto Vallarta, Mexico - The Mexican peso strengthened against the U.S. dollar on Friday morning, October 4, buoyed by positive labor market data from the United States. As of 6:52 a.m., the exchange rate stood at $19.33 Mexican pesos per dollar in the spot market, reflecting an appreciation of 0.11% compared to Thursday's close. This marks a continuation of the peso’s recent trend, driven by both domestic and international economic factors.
