Mexico’s Industrial Output Declines, Raising Economic Concerns

Mexican Peso’s Tiny Tug‑of‑War With the Dollar

The Mexican peso scuttled a smidge against the U.S. dollar, with the USD/MXN pair climbing 0.2% during the day. A slight uptick, but not the dramatic rally analysts were hoping for.

Why the Peso is Feeling a Little Weak Under the Weather

The main culprit? Some disappointing numbers from Mexico’s own economy, reminding investors that structural hiccups still sit in key sectors.

Industrial Production (Oct): Fell 1.2% month‑over‑month – a bigger wobble than the forecasts suggested.
Mining & Construction:
- Mining shrank 1.9% monthly and a solid 6.8% year‑on‑year.
- Construction nudged up 0.5% monthly, but still down 8.9% annually.
Energy, Water & Gas: A modest 0.4% monthly gain, 1.4% yearly – not enough to tip the scale.
Manufacturing: A 1.9% monthly decline, slammed by supply chain snags and sky‑high costs.

How the U.S. Adds Its Own Flavor of Uncertainty

Meanwhile across the border, the U.S. paints a patchwork picture:

Jobless claims rose unexpectedly—mounting a subtle but steady pressure on the labor market.
The core Producer Price Index slowed, but the headline PPI surprised by exceeding expectations.
With these mixed signals, the Fed is poised to trim rates by 25 basis points at its next meeting, though future cuts might still be an elitist sport.

The peso’s fate now hinges on what Mexico reports next, especially private spending and retail sales. A bad surprise could revive selling nerves, while a positive turn could give the currency a much‑needed $boost.

Bottom Line

In this sticky spot, the Mexican peso is juggling domestic hiccups and global policy jitters. The uneasy mix of weak domestic stats and U.S. monetary policy uncertainty demands a careful, watchful stance toward the USD/MXN.