USD/MXN: Mexican peso rises to the highest in a week
|The Mexican peso rose across the board on Friday and gained 1% versus the US dollar. The move takes place the day after the Bank of Mexico left interest rate unchanged at 7%, as expected.
“Banco de Mexico has likely ended its tightening cycle. After hiking at seven straight meetings, rates were kept steady for the first time since last August. The statement strikes us as being on the dovish side, saying that inflation has likely peaked and will turn lower in H2. It added that the current policy rate is consistent with moving inflation back to the 3% target”, said analysts from Brown Brothers Harriman. Inflation data showed on Wednesday, that the annual CPI rate in July rose to 6.44%, the highest level since December 2008.
MXN outperforms
Latin American currencies rose on Friday versus the US dollar. The greenback weakened after a lower-than-expected US CPI reading. The Mexican peso outperformed.
USD/MXN dropped sharply on Friday, erasing weekly gains. On Wednesday the pair reached at 18.05, the highest level in four weeks. Today it approached that area before turning to the downside.
During the American session accelerated the decline and bottomed at 17.75, the lowest since August 1. It was about to end the week at 17.83, practically unchanged from the level it had a week ago. Today’s slide pushed the price below a short-term uptrend line signaling that the bullish correction from 1-year lows is likely over.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.