Published: 24 Apr at 6 PM Tags: Dollar, America, Canadian Dollar, USA, Canada, Mexico,
After a report compiled by the US Commerce Department revealed that orders for goods designed to last for over three years decreased by more than economists forecast, the currencies of nations who rely heavily on the US for trade fell against their main rivals.
The Mexican Peso weakened to 12.2790 Peso per US Dollar during local trade after durable goods orders were shown to have fallen by 5.7 per cent in March.
Economists had anticipated a slump of 3 per cent.
US durable goods orders for February were also negatively revised to a gain of 4.3 per cent.
After the report was published one senior economist stated: ‘The headline number was very bad’.
Meanwhile another industry expert observed: ‘[US] Manufacturing ended the quarter on a very weak note. Not only was the March number weak but we lost on the prior revision.’
As roughly 4/5ths of Mexican exports end up in the US, this was disappointing news for the Latin American nation.
The commodity-driven Canadian Dollar also weakened against its American counterpart in response to this latest data.
Although the Mexican Peso has advanced by 4.7 per cent against its US counterpart in the last four months, if concerns regarding the recovery of the world’s largest economy continue to grow the currency’s rally could end abruptly.
As strategist David Doyle notes: ‘What we’re seeing is doubts about the sustainability of global growth come to the forefront. Doubts about the sustainability of U.S. growth could raise potential for Canada
] to suffer more of a downturn’.
If tomorrow’s initial jobless claims figures for the US exceed estimates the Peso could post additional declines.
Mexico’s trade balance figures and the Banco de Mexico’s rate decision (both scheduled for publication on the 26th of this month) are also likely to inspire Peso movement.
As of Wednesday, 24th April 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP USD exchange rate was 1.5272, GBP CAD exchange rate was 1.5661, and GBP MXN exchange rate was 18.5904.