The Mexican peso posts a slight gain following Banxico’s interest rate cut.
The local currency experienced moderate gains against the dollar on Thursday. The Mexican peso advanced during a session characterized by increased risk appetite for assets but tempered its rise, even dipping at times before the local interest rate cut.
The exchange rate closed the day at 19.6225 pesos per dollar, showing a slight increase of 1.75 cents or 0.09% from yesterday’s official close of 19.6400 pesos, according to data from the Bank of Mexico (Banxico).
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The dollar traded within a range, reaching a high of 19.7540 pesos and a low of 19.4674 pesos. The U.S. Dollar Index (DXY), which compares the dollar against six major currencies, fell by 0.34% to 100.57.
On Thursday, Banxico announced a divided decision to lower its key interest rate by 25 basis points, as anticipated by the market. Prior to this announcement, the peso had depreciated amid uncertainties regarding the magnitude of the adjustment.
This move by the central bank comes after inflation data for the first half of September confirmed ongoing moderation in price pressures, and following a 50 basis point cut by the Federal Reserve (Fed) last week.
The peso’s appreciation is partly attributed to market expectations of a larger cut of 50 basis points. Additionally, the decision was not unanimous, suggesting a less flexible outlook for future announcements.
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