Published: 3 May at 6 PM Tags: Euro, Dollar, America, Eurozone, USA, Mexico, South Africa,
Less-than-impressive US data has put pressure on the Mexican Peso over the past month, but with US unemployment falling to a four year low of 7.5 per cent the Peso climbed on its North American rival, strengthening to 12.1075.
relies on the US for the majority of its trade, stabilisation in the US labour market would be good news for Mexican exports and national growth.
In response to the news one strategist with Scotiabank asserted: ‘It’s positive on many sides for the peso’.
The Labour Department report detailed a larger-than-expected non-farm payrolls increase of 165,000 in April and significantly upwardly revised the figure previously recorded for March.
This news is more positive than investors expected, and throws doubt on the likelihood of the Federal Reserve stepping up its stimulus programme to support growth.
When the FOMC met this week it stated that it was ready and willing to take whatever policy action the economic recovery required, and given recent lacklustre US manufacturing and employment data industry experts had begun to speculate on a potential increase of the Fed’s current monthly-asset purchases.
But with the employment rate the lowest it has been since December 2008, the odds of the FOMC approving additional bond-buying have lowered considerably.
The market experienced notable volatility in the aftermath of the US report. After a bout of bullishness the US Dollar shed some gains following the publication of separate data showing that US service industries expanded at the slowest pace since mid-2012 while US factory orders declined by more than anticipated.
But, despite the 4 per cent drop, one economist asserted: ‘We do expect manufacturing to bounce back in the second half as the fiscal headwinds fade and global demand starts to regain its footing. It’s a soft patch reflecting the impact of fiscal tightening and weak overseas markets.’
Although the Rand initially weakened it later gained in line with rising gold prices, and while the Euro briefly sank against the US Dollar the common currency was able to recover some ground before the European session came to a close.
As of Friday, 3rd May 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1876, GBP USD exchange rate was 1.5573, GBP MXN exchange rate was 18.7998, and GBP ZAR exchange rate was 13.8743.