Mexican Peso Trades to Highest Level in 2017 Against USD on Positive Comments by Banxico, Falling U.S.Retail Sales

Mexico’s peso rose 0.3 percent on Friday to a new high for 2017. The peso began Friday’s trading session at 18.58308 - about 0.36 percent above Thursday’s low. But by 10:45 a.m. EST on Friday, the USD/MXN exchange rate slid to its lowest level so far this year: 18.49637!

Today weakness in the USD/MXN rate was also influenced in part by poor economic data coming out of the United States. More specifically, falling retail sales and consumers price index readings for March, which posted declines of 0.2 and 0.3 percent, respectively.

While volatility in the USD/MXN rate was rather subdued today as most large European and Canadian markets remained closed for Good Friday, the majority of the peso’s gains were made earlier in the week.

On Wednesday, the Mexican peso appreciated by 1.2 percent after the Mexican central bank, Banxico, released the minutes of its monetary policy meeting for March.

Banxico’s report said the situation in Mexican financial markets had improved considerably after the last interest rate increase at the end of March, when the Board of Governors of the Bank of Mexico voted to hike rates by 25 basis points, “In the weeks after the final decision of monetary policy of the Bank of Mexico, the financial markets in our country showed favorable behavior.,“ the report states.

Banxico also said:
“Thus, the Mexican peso presented an appreciation of 7.8 per cent, standing out as the currency with the best performance observed within the complex of currencies of emerging countries, which was accompanied by a significant improvement in the conditions of operation of the foreign exchange market.”
Although Mexico's currency traded at its highest level for this year on Friday morning, it couldn’t hold onto those gains into the close of the day. The USD/MXN Forex pair closed at 18.52035 - approximately 0.13 percent higher than the morning lows of 18.49637:

Pesos photo by Mad African