The Mexican peso marginally lost ground this Tuesday against the American dollar. The local currency showed little change in a day with erratic movements due to higher than expected inflation in Mexico.
The National Consumer Price Index (INPC) advanced 6.24% in October, its highest level since December 2017. Analysts projected 6.18% from 6% in September. Core inflation was 5.19%, the worst since May 2009.
The exchange rate ended the day at 20.3254 against a record of 20.3231 units per dollar yesterday, with data from the Bank of Mexico (Banxico). This meant a slight weight loss of 0.01%, which was less than a penny.
The cross moved in a limited range between a maximum of 20.3748 units (which touched a few minutes after the data was known) and 20.2516 units per dollar. Inflation reinforces bets for another rate hike in Mexico.
“We see a significant risk that the increase will be from 50 basis points to 5.25 percent. We cannot rule out this scenario given the current inflationary dynamics and lower global monetary laxity,” Banorte explained in a report.
The behavior of inflation in the United States will be known tomorrow and any bullish surprise is likely to rekindle speculation about an advance of rate hikes by the Federal Reserve (Fed).
Reference-www.eleconomista.com.mx