The currency loses ground in a market reacting to higher-than-expected U.S. Producer Price Index (PPI) data, which pressures rate cut expectations.
The Mexican peso depreciates against the dollar on Tuesday morning. The local currency is losing ground in a market reacting to higher-than-expected U.S. Producer Price Index (PPI) data, which pressures rate cut expectations.
The spot exchange rate stands at 16.8430 units per dollar. Compared to yesterday’s closing of 16.8123 units, according to data from the Bank of Mexico (Banxico), the movement represents a decrease of 3.07 cents for the peso, equivalent to 0.18 percent.
The price of the dollar is trading in a narrow range between a high of 16.8725 units and a low of 16.7715 pesos. The Intercontinental Exchange’s Dollar Index (DXY), which measures the greenback against six benchmark currencies, gains 0.18% to 105.03 points.
USD/MXN
Investors react negatively to the Producer Price Index (PPI) data. Specifically, the index grew 0.5% month-on-month in April, above analysts’ expectations of 0.3%, according to The Wall Street Journal, and the March figure of 0.2%.
The rise in producer prices signals that pressures continue to make it difficult for consumer inflation to resume the downward trend towards the Fed’s 2% target. For now, attention was also focused on statements to be made by Jerome Powell, the Fed chair, at an event of the Foreign Bankers Association in Amsterdam, seeking signals about the next moves in interest rates.