Mexican Peso falls after weak Consumer data, Banxico comments
The Mexican Peso is trading between mild gains and losses in its key trading pairs on Tuesday as markets return to calm following the dramatic downturns witnessed in the preceding week.
This comes after the Peso lost over a percentage point against its key rivals on Monday in a turnaround from the three days prior when it saw a run-up.
Monday’s pull-back may reflect profit-taking ahead of key US inflation data for July, which will be released on Tuesday (today) in the form of Producer Price Index (PPI), which measures the changes in wholesale “factory-gate” prices, followed by the US Consumer Price Index (CPI) data on Wednesday.
Lower-than-expected inflation in the US will suggest interest rates are coming down more quickly than foreseen, which, in turn, will likely weigh on the US Dollar (USD), pushing USD/MXN down too. The opposite will likely be the case in the event inflation data beat estimates.
The Peso struggled at the start of the week after the release of Mexican Consumer Confidence data for July revealed a fall from the previous month. Confidence dropped to 46.9 from a five-year high of 47.5 in June, according to data from the Instituto Nacional de Estadistica Geografia e Informatica (INEGI), released on Monday.
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