Mexican Peso Surges to Familiar Highs as Risk Appetite Rebounds

• Mexican Peso rebounds against the US Dollar amid market sell-off.
• Mexico Trade Balance overshadowed by US PCE Price Index.
• Surprise drop in US inflation spurs risk aversion despite mixed results.

Today, the Mexican Peso (MXN) is gaining ground against the US Dollar (USD) as broader markets sell off the Greenback despite mixed results from the day’s slew of US data points.

Economic data from Mexico was limited, and November’s Mexico Trade Balance figures due on Friday are set to continue being overshadowed by the US Personal Consumption Expenditures (PCE) Price Index.

The Mexican Peso’s late decline on Wednesday has been reversed, and it is back on the rise as pre-holiday market churn produces plenty of froth and market moves become harder to explain.

Daily digest market movers: Mexican Peso rebounds to familiar highs in a risk-bid resurgence

• Mexican Peso climbs back into familiar highs against the US Dollar as stock markets rally.
• Broad-market risk appetite rebound sees the MXN up around half a percent against the USD.
• Mexico inflation for the first half-month of December came in above expectations but still declined from the previous period’s 0.63%, printing at 0.52% for the first two weeks of the month versus the forecast decline to 0.4%.
• The Greenback is the single worst-performing currency of the majors on Thursday.
• Easing inflation and growth figures from the US are ramping up market bets of even further rate cuts in 2024.
• US Initial Jobless Claims rose to 205K from 203K (revised upwards slightly from 202K), undercutting the market forecast of 215K.
• Money market rate cut expectations have run far ahead of the Fed’s dot plot; investors see 160 basis points in rate cuts for 2024 versus the Fed’s own expectations of 75 bps.
• US Core PCE inflation settled at 2.0% in the third quarter, below the median market forecast of a hold at 2.3%.
• US Annualized Gross Domestic Product (GDP) also undercut forecasts, printing at 4.9% compared to the expected print of 5.2%.
• Mexico November Trade Balance (in USD terms) is expected to rebound from -252 million to 404 million.
• November’s YoY US Core PCE Price Index inflation, forecast to decline from 3.5% to 3.3%, will be the headliner on Friday and set overall market direction heading into the holiday break.

US Dollar price today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the weakest against the Australian Dollar.