Peso Persists: A Tug‑of‑War Between Mexican Decline and US Dollar Support
The Mexican peso nudged up 0.35% today, showing a dash of resilience even as it faces a pretty rough backdrop.
Mexico’s Industrial Brake
Recent figures warn investors that the industrial engine is sputtering:
- IMAI fell 0.4% in January, a yearly drop of 2.8%.
- Mining & Extraction hit an all‑time low: oil down 8.8%, gas down 10.7%.
- Construction slid 6.7% year‑on‑year.
- Manufacturing dropped a modest 0.8%, with textiles, machinery, and metal goods hitting the hardest.
It’s like a classroom where the “stickiness” of manufacturing has fallen off the desks—an unsettling sight for market watchers.
US Inflation Slowdown Lifts Peso Mood
On the other side of the border, the US has pulled back from its inflation high‑roller club:
- Household PPI stayed flat in February, missing expectations.
- Consumer CPI cooled to 2.8% annually—faster than the Fed may act.
This cool‑off hints at a dovish Fed, a sweet spot for emerging‑market currencies like our peso.
Risky Road Ahead
Even with the reset, danger still lurks:
- Global trade tension may trigger a risk‑off rush.
- Possible US recession warnings could skid the peso.
- Market eyes on the Fed’s next policy move—dovish tones clear the way for the peso; hawkish stances will hammer the dollar and squeeze the peso tighter.
For now, the peso is playing a delicate game of “tread carefully” while keeping an eye on the Fed’s next play.
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