MEXICAN PESO GAINS AS MAIN CURRENCY PEERS SUFFER ON LOWER INTEREST-RATE OUTLOOK
- The Mexican Peso rises in key pairs as expectations of lower interest rates in the US and Europe weigh on counterparts.
- The USD is hit by a revival of the debate over a 50 or 25 bps cut, and the Euro by lower economic growth forecasts.
- USD/MXN reaches the downside target after a key breakout from a rising channel.
The Mexican Peso (MXN) extends its gains on Friday, capping off a week in which the currency has appreciated on average 2.3% against its most heavily-traded counterparts so far.
The expectation that interest rates will fall more rapidly in Europe and the US as growth slows and labor markets weaken is weighing on the Peso’s key counterparts – the US Dollar (USD), the Euro (EUR) and the Pound Sterling (GBP). Meanwhile, still-elevated interest rates in Mexico, at 10.75%, continue to attract foreign capital inflows, supporting MXN.
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