The Mexican economic system grew surprisingly strongly within the third quarter, based on the primary estimate. As a substitute of 0.6%, based on the Bloomberg median, it grew by nearly 1% quarter-on-quarter, the best fee in a yr, Commerzbank’s FX analyst Michael Pfister word.
Threat of Trump turning into president weighs on peso
“This was most likely primarily on account of a surprisingly robust improve in agricultural merchandise, which appear to have recovered from the pure disasters within the first half of the yr. Nevertheless, one shouldn’t hope that this implies the top of Mexico’s interval of weak spot. It’s extra doubtless that this was an outlier and that progress within the coming quarter will probably be extra according to the latest development.”
“Regardless of the surprisingly good figures, the Mexican peso didn’t actually profit from them. In truth, USD/MXN hit a two-year excessive shortly after the information was launched. For now, the peso is concentrated on different issues: the extra doubtless it turns into that Donald Trump will turn out to be the brand new US president, the extra the peso will come underneath strain.”
“It is because vital tariffs in opposition to Mexico turn out to be more likely. So it ought to come as no shock that the alternate fee is unlikely to react to Mexican information within the coming days.”