Mexican Peso holds steady, poised for weekly losses
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USD/MXN flats near 19.58 as soft Mexican manufacturing and Banxico’s dovish tilt weigh against strong US jobs data. Mexico’s dismal data suggests the economic slowdown might continue as PMI hits three-year low, business confidence deteriorates. Banxico is seen cutting rates in May, widening policy gap with Fed and pressuring Peso outlook. The Mexican Peso (MXN) remained firm against the US Dollar (USD), though it is poised to finish the week with losses of over 0.40% after economic data revealed in Mexico painted a gloomy economic outlook, despite the fact that the economy surprisingly grew in the first quarter of 2025. Also, solid US jobs data tempering recession fears kept USD/MXN near the 19.58 mark virtually unchanged. Mexico’s economic docket revealed that business confidence deteriorated for the third consecutive month in April. At the same time, S&P Global revealed that manufacturing activity for the same period plummeted to its lowest level in three years, contracting for the fourth consecutive month according to the Manufacturing PMI index. Across the northern border, positive trade news between the US and China capped the USD/MXN pair gains as the Greenback posted some losses. On the data front, April’s Nonfarm Payrolls exceeded estimates and trailed the previous reading. Alongside this, the Unemployment Rate stands pat, highlighting the US labor market’s robustness. The Federal Reserve (Fed) is expected to hold rates unchanged at next week’s meeting. On the contrary, Banco de Mexico (Banxico) has signaled its intentions to continue easing monetary policy at its May meeting to support the economy, even though inflation hasn’t quite reached the 3% goal. Therefore, the divergence between both central banks could pressure the Peso and boost the US Dollar prospects. Daily digest market movers: Mexican Peso unfazed by bad data Mexico’s Business Confidence in April came at 48.5, down from 49.7…
Filed under: News - @ May 3, 2025 7:24 pm