Puerto Vallarta, Mexico – The Mexican peso is experiencing a depreciation against the U.S. dollar this Tuesday morning, marking the second consecutive day of decline. This downward trend follows the release of a weaker-than-expected report on retail sales in Mexico and growing anticipation of comments from two key members of the U.S. Federal Reserve later today.
As of the latest data, the spot exchange rate stands at 18.7606 pesos per dollar. This represents a depreciation of 6.21 cents compared to yesterday’s official closing price of 18.6985 pesos, according to the Bank of Mexico (Banxico). This shift equates to a 0.33 percent variation, reflecting the peso’s struggle in the face of emerging economic concerns.
The dollar is currently trading within an open range, with its highest point at 18.8765 pesos and its lowest at 18.6562 pesos. The Dollar Index (DXY), which measures the greenback’s strength against a basket of six major currencies, is down 0.18%, standing at 101.71 units. Despite the dollar’s slight retreat, the peso’s performance remains under pressure from both domestic and international factors.
Impact of Retail Sales Data
The peso’s recent depreciation has been significantly influenced by the latest data from the National Institute of Statistics and Geography (Inegi). Earlier today, Inegi reported an unexpected 0.5% decline in retail sales for June, adjusted for seasonality. This drop marks the worst performance since January and exceeds the expected decline of 0.2%. The disappointing retail sales figures underscore ongoing economic challenges in Mexico, which are now weighing heavily on the peso’s value.
“Today, the peso opened the day by reducing yesterday’s gains, mainly affected by local retail sales data, while markets await the biweekly inflation figures and GDP at the end of the week (on Thursday),” stated a report from Monex, a leading financial services firm in Mexico.
Technical Analysis and Market Sentiment
Despite the initial losses, the peso has managed to recover from a more significant early loss of over 1 percent. Analysts suggest that the currency’s movement is also being influenced by renewed concerns surrounding the controversial reform of the Mexican justice system, which continues to generate uncertainty among investors.
From a technical perspective, the peso’s recent performance has been characterized by its approach towards the resistance level of 18.85 pesos. According to a note from Vector Analysis, this movement may indicate a validation of a new ceiling, suggesting the potential for the peso to resume appreciation, with a target of 18.50 pesos in the near term.
Federal Reserve and Jackson Hole Symposium Awaited
Market participants are also closely watching the upcoming Jackson Hole symposium, scheduled for later this week, where global central bankers, including members of the U.S. Federal Reserve, will discuss key economic issues. In the lead-up to this event, investors are keenly awaiting comments from Raphael Bostic, President of the Federal Reserve Bank of Atlanta, and Michael Barr, Vice Chairman for Supervision at the Federal Reserve, both of whom are expected to provide insights into the Fed’s monetary policy outlook.
The peso’s recent depreciation highlights the complex interplay between domestic economic indicators and global market expectations. As the week progresses, the Mexican currency’s trajectory will likely be influenced by further economic data releases and the outcomes of key central bank discussions. For now, the peso remains under pressure, reflecting the broader challenges facing the Mexican economy amid uncertain global conditions.
Puerto Vallarta, Mexico – The Mexican peso is experiencing a depreciation against the U.S. dollar this Tuesday morning, marking the second consecutive day of decline. This downward trend follows the release of a weaker-than-expected report on retail sales in Mexico and growing anticipation of comments from two key members of the U.S. Federal Reserve later today.
