The Mexican peso fell versus the US dollar today despite the greenback was soft itself. The likely reason for the peso’s weakness was Mexico’s poor macroeconomic data. Escalation of the US-China trade war also had a very negative impact on the currency.
According to the final estimate, Mexico’s gross domestic product shrank 0.8% in the June quarter, year-on-year, after rising 1.2% in the previous three months. The reading matched the consensus forecast. The preliminary estimate showed a bit smaller decrease of 0.7%.
Mexico’s economic activity index fell by 0.9% in June, year-on-year, after declining by 0.4% in the previous month. The median forecast had promised a smaller decrease of 0.6%.
While the domestic data was negative to the peso, worsening tensions between the United States and China had arguably an even bigger impact on the currency. The conflict between the two world’s biggest economies spooked investors, hurting riskier currencies of emerging markets.
USD/MXN rose from 19.8177 to 19.8667 as of 18:28 GMT today. The currency pair hit a high of 19.9377 and the low of 19.7584 intraday.
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