Mexican Peso slips despite strong Retail Sales, Banxico dovish bets weigh
The post Mexican Peso slips despite strong Retail Sales, Banxico dovish bets weigh appeared on BitcoinEthereumNews.com.
Mexican Peso weakens 0.24% even as DXY slips, reflecting Banxico rate cut expectations. Data shows resilient Retail Sales, but economic contraction fuels a dovish policy outlook. Citi survey predicts Banxico cutting 50 bps this week; markets also eye US PCE inflation print. The Mexican Peso (MXN) dips against the US Dollar (USD) in early trading during Tuesday’s North American session, as the emerging market currency fails to advance following a strong Retail Sales report for January, released by the Instituto Nacional de Estadística, Geografía e Informática (INEGI). At the time of writing, USD/MXN exchange rate is 20.07, up 0.24%. The Peso remains on the defensive, even though the Greenback posts losses, as depicted by the US Dollar Index (DXY). The DXY, which measures the performance of the American currency against other six, falls 0.23% and clings to the 104.00 figure. INEGI reported that consumers continue to spend at a good pace, as revealed by Retail Sales. Nevertheless, January’s economic contraction and the dip in mid-month inflation in March had increased the odds that Banco de Mexico (Banxico) would reduce interest rates by 50 basis points (bps) at its Thursday meeting, from 9.50% to 9%. The Citi Expectations Survey revealed that most private economists expect Banxico to reduce rates by 50 basis points. According to the survey, Mexico’s primary reference rate is expected to end 2025 at 8%, down from 8.25%. Given the backdrop, further upside is seen in USD/MXN. However, if US President Donald Trump makes tariff exemptions to Mexico, the outlook for the economy could improve. Hence, the Peso could strengthen and exert downward pressure on the exotic pair. Ahead this week, Mexico’s docket will feature the Balance of Trade and Banxico’s interest rate decision. Across the border, the US schedule will feature the release of the Fed’s preferred…
Filed under: News - @ March 25, 2025 6:25 pm