The Mexican peso fell as poor macroeconomic data from the United States led to concerns about Mexico’s economic growth and speculations that policy makers may cut interest rates. The currency gained versus the euro, paring the earlier losses.
Virtually all US fundamental reports on the first trading day of May were bad. Employment, manufacturing and construction data disappointed market participants, making them reluctant to buy risky currencies. The peso was especially vulnerable as the USA is the biggest trading partner of Mexico.
Mexican policy makers were worried about potential economic slowdown in the country. Central bank’s Governor Agustin Carstens said at the beginning of this week that the bank may refer to cutting borrowing costs if inflation slows.
USD/MXN rose from 12.2005 to 12.2026, while EUR/MXN fell from 16.0796 to 16.0763 as of 1:05 GMT today.
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