Puerto Vallarta, Mexico – The Mexican peso is gaining ground against the U.S. dollar on Tuesday morning, marking its sixth straight day of appreciation. The local currency’s advance comes on the heels of better-than-expected U.S. manufacturing activity figures, which have influenced investor sentiment.
According to data from the Bank of Mexico (Banxico), the spot exchange rate stands at 20.2272 pesos per dollar, reflecting a gain of 7.34 cents or 0.36 percent from Monday’s official closing rate of 20.3006 pesos per dollar. The peso has been trading in a range with a high of 20.3361 units and a low of 20.2210.
Meanwhile, the Dollar Index (DXY), which measures the greenback’s strength against a basket of six major currencies, has risen by 0.28% to 107.03 units.
U.S. Manufacturing Data Surpasses Expectations
A key driver of the peso’s appreciation is the latest report on U.S. manufacturing activity. The Federal Reserve’s Empire State index, which gauges manufacturing activity in the New York region, posted a reading of 5.7, significantly outperforming market expectations of -1.0, according to a Reuters survey.
This positive data suggests resilience in the U.S. economy, which in turn influences monetary policy expectations and currency movements.
Global Market Factors and U.S. Political Developments
Market participants are also closely watching statements from U.S. President Donald Trump regarding trade policy and geopolitical developments. In particular, Trump’s tariff plans could heighten market volatility and impact investor risk appetite, potentially exerting upward pressure on the exchange rate.
Additionally, ongoing discussions involving Russia, Ukraine, and Saudi Arabia are being monitored for potential market implications.
Banco Base has projected a trading range of 20.21 to 20.42 pesos per dollar for the session, cautioning that any escalation in trade tensions could shift market sentiment.
Local Economic Indicators Show Modest Growth
On the domestic front, the National Institute of Statistics and Geography (Inegi) reported preliminary data indicating a 1.8% year-over-year increase in Mexico’s economic activity for January 2024. Compared to December, economic activity grew by 0.1%.
Despite this growth, analysts at Monex noted that signs of an economic slowdown are emerging for 2024. The final results of Mexico’s General Indicator of Economic Activity (IGAE) for December, scheduled for release on February 21, along with fourth-quarter GDP figures, will be closely watched for confirmation of this trend.
Federal Reserve Officials in Focus
Investors are also paying attention to remarks from Federal Reserve officials Mary Daly and Michael Barr, who are set to speak at public events later in the day. Their statements could provide further insights into the Fed’s monetary policy outlook, influencing currency movements and risk sentiment in global markets.
As the peso continues its upward trajectory, market participants remain attentive to both domestic and international economic signals that could shape currency trends in the coming days.
Puerto Vallarta, Mexico - The Mexican peso is gaining ground against the U.S. dollar on Tuesday morning, marking its sixth straight day of appreciation. The local currency's advance comes on the heels of better-than-expected U.S. manufacturing activity figures, which have influenced investor sentiment.
