Mexican Peso MXN Drops Ahead of Expected Rate Hike by Banxico

Mexico’s peso slipped on Thursday, pulling back after a modest rally this week, but an interest rate hike by the country’s central bank later in the session could support the currency.

The peso slid about 0.4 percent to 20.30 per dollar.

The peso dipped after the head of the U.S. Federal Reserve said the central bank could raise interest rates “relatively soon.” Higher U.S. interest rates could sap demand for emerging market assets.

The peso extended losses after U.S. consumer prices recorded their biggest increase in six months in October, backing bets for a Fed hike in December.

Mexico’s peso was battered to a record low by the election of Donald Trump as U.S. president and it shed more than 8 percent last week. The peso has gained back some ground in the past three sessions and is up more than 2 percent this week.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza