Home Business News Mexican Peso cautious ahead of unemployment data and upcoming elections

Mexican Peso cautious ahead of unemployment data and upcoming elections

29th May 24 10:32 am

The Mexican Peso remained relatively stable against major currencies but maintained a bullish outlook in the long run.

This reflects the positive momentum that continues to attract investor inflows due to Mexico’s high interest rates.

The Peso could remain steady as market participants await key inflation data from the US and Mexican unemployment figures, which could bring volatility to the Dollar-Peso pair.

The release of unemployment data is scheduled for Thursday, with market consensus projecting an increase to 2.6% in April, up from March’s reading of 2.3%. In the near term, the Peso could further depreciate if the unemployment data reveals a higher-than-expected rate.

On the other hand, the Mexican currency could find support if the unemployment figures turn out to be lower than market expectations. The position of the Mexican central bank (Banxico) on interest rates, particularly with Deputy Governor Irene Espinosa advocating for maintaining current rates despite inflationary pressures, is also supportive, potentially leading to further appreciation of the Mexican currency.

Additionally, with the upcoming Mexican elections, despite the expected continuity of the current party of AMLO in power, “Morena”, market participants might mitigate position taking as a precautionary measure ahead of the presidential elections.

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