The peso leads the declines in the foreign exchange market due to fears of a possible recession in the United States and concerns that the Federal Reserve will cut interest rates too late.
The Mexican peso experiences a sharp fall this Monday morning. The local currency leads the decline, affected by investor fears that the United States is on the verge of a recession and that an interest rate cut by the Federal Reserve will be delayed.
The spot exchange rate stands at 19.6548 units per dollar. Compared to Friday’s official closing of 19.1624 units, according to data from the Bank of Mexico (Banxico), this movement represents a loss of 49.24 cents, equivalent to a variation of 2.57 percent.
The price of the dollar oscillates in an open range, reaching a maximum of 20.2422 units, the highest level in more than two years, and a minimum of 19.0201 units. The Dollar Index (DXY) of the Intercontinental Exchange shows a drop of 0.68%, standing at 102.50 points.
The exchange rate exceeded the barrier of 20 units during operations in the Asian market, reaching levels not seen since September 2022, after a sharp fall in the financial markets of that region, especially in Japan.
“Investors panicked due to speculation about a possible recession in the United States economy, which has resulted in a session of heavy losses in most world markets,” CIBanco explained.
In the last three sessions, the peso has accumulated a loss of around 5.5%, after it was learned that manufacturing activity in the United States fell to its lowest level in eight months and after a weak labor market report.
Mexico is particularly sensitive to the economic prospects of the United States, its main trading partner. Furthermore, the Mexican currency has been under strong pressure since local elections on June 2, when Morena won a landslide victory.
Since then, the peso has accumulated a loss of more than 15%, and some analysts also attribute part of the losses to information about the elections in the United States. Donald Trump, the Republican candidate, is especially critical of Mexico.
