USD/MXN back below 19.00, hits fresh 4-month lows
|The Mexican peso gained momentum today in the currency market and pushed USD/MXN back below 19.00 amid statements from the Finance Minister and the Central Bank Governor and despite warnings from a rating agency.
Finance Minister, Jose Meade, said today that the economy could face further volatility but that under the new scenario, is becoming more contained.
Bank of Mexico’s governor, Agustin Carstens, mentioned that the Mexican peso is undervalued by around 10%. He added that there is room to continue rising interest rates. The next meeting of Banxico is next Thursday. The central bank has been raising rates, in order to control inflationary pressures. Today’s report showed that inflation rose to an annual rate of 5.29% in March, the highest in seven years.
Also today, the rating agency, Moody's Investors Service, published a report warning that higher borrowing costs would weigh on the country's lackluster economic performance and could present a problem to the private sector for short-term financing.
USD/MXN decline continues under 19.00
USD/MXN dropped to 18.91, the lowest since the day of the US Presidential elections as it continues to decline after reaching in January record high levels above 22.00. So far during 2017, the peso gained almost 10% against the US dollar and is among the top performers in the market.
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