Mexican Peso weakened as US Dollar gains despite falling US yields.
IMF downgrades Mexico's 2024 GDP growth outlook, citing capacity constraints and tight monetary policy.
US import prices fell sharply in September, while Fed’s Bostic remains optimistic about inflation hitting the 2% target.
The Mexican Peso depreciated in early trading on Wednesday as the US Dollar strengthened amid a mixed market mood with falling US Treasury yields. Softer inflation readings among developed countries suggest that further easing is coming, indicating that the global economy might slow down. The USD/MXN trades at 19.87, registering gains of 1%.
US equities are fluctuating as traders shifts focus toward small caps as the Russell 2000 outperforms the NASDAQ and S&P 500. Therefore, emerging market currencies sensitive to risk, like the Peso, remained on the back foot.
On Tuesday, the International Monetary Fund (IMF) revised Mexico’s economy downward to 1.5% in 2024 due to capacity constraints and a restrictive monetary policy. This is well below the 2.4% estimated by the Secretaria de Hacienda y Credito Publico (SHCP).
The IMF estimates GDP growth for the next year at 1.3% as inflation closes in on the Bank of Mexico’s (Banxico) 3% objective.
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