Published: 23 Sep at 5 PM Tags: Dollar, America, Australian Dollar, Australia, USA, China, Mexico,
For the first time in several days Mexico
’s Peso was able to post a notable gain on the US Dollar.
The South American asset strengthened to 12.7936, ending a two-day losing streak, as Mexico’s retail sales were shown to have jumped by 1.3 per cent in July, year-on-year – significantly better than the gain of 0.5 per cent expected by economists and almost reversing the 1.9 per cent decrease recorded in June.
This surprisingly strong result is positive news, particularly given that domestic concerns led to policy makers cutting the nation’s growth forecast to 1.8 per cent last month.
A separate domestic report showed that wholesale trade declined by 1.4 per cent in July, a far slower rate than the contraction of 8.5 per cent seen the previous month.
This week additional Peso movement could be inspired by Mexico’s balance of trade data, due for release on Thursday. Of course US news will remain a major catalyst for market movement.
The Peso’s advance on its US counterpart was aided by the news that two prominent officials from the Federal Reserve are in support of the central bank’s decision to refrain from tapering stimulus.
Although James Bullard, President of the Federal Reserve Bank of St Louis, said last week that stimulus could be trimmed in October, two of his fellow Fed Presidents have adopted a different stance today.
William C. Dudley, who heads up the Federal Reserve Bank of New York, expressed support for US easing remaining accommodative for the foreseeable future. He also intimated that forceful action was required by policymakers if the US was going to overcome the more stubborn economic hurdles it's facing, like unemployment.
Meanwhile, Bank of Atlanta President Dennis Lockhart, stated that creating a ‘dynamic economy’ should take precedence at the moment.
While the Peso gained on the ‘Greenback’ after these speeches were made, the US Dollar broadly softened – posting a significant decline against peers like the Yen.
The news that preliminary US Markit PMI came in lower than anticipated also helped the US Dollar maintain a bearish relationship with several of its most traded peers.
Higher-risk currencies like the 'Aussie' were also boosted by the news that China
's manufacturing sector expanded by more than expected, a fact which improved global trade prospects.
As of Monday, 23rd September 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP USD exchange rate was 1.6041, GBP AUD exchange rate was 1.7029, GBP CNY exchange rate was 9.8185, and GBP MXN exchange rate was 20.5548.