Mexican Peso Retreats as Bernanke Evaporates Optimism

The Mexican peso retreated today, after reaching the highest level in more than two weeks against the US dollar yesterday, as comments of the Federal Reserve Chairman Ben Bernanke muted optimism of Forex traders.
Bernanke warned about the negative impact of the crisis in Europe. He also mentioned a fiscal tightening, saying “a severe tightening of fiscal policy at the beginning of next year that is built into current law — the so-called fiscal cliff — would, if allowed to occur, pose a significant threat to the recovery”. Yesterday, the peso touched the highest level since May 22 versus the greenback. Mexico’s inflation accelerated to 3.85 percent in May from 3.41 percent in April.
USD/MXN rose from 14.0640 to 14.1690 as of 9:11 GMT today.

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