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By xemarketanalysis April 19, 2018 1:45 pm
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    XE Market Analysis: Mexican Peso Falls on Political Jitters

    OVERVIEW

    • FX market generally quiet with little economic data released.
    • GBP falls after weak retail sales but recovers on M&A announcement.
    • USD flat, Fed's economic survey suggests economy still growing "moderately".

    HIGHLIGHT

    The Mexican Peso is down over one percentage point versus the US Dollar, with investors unnerved by the strong performance in the latest opinion polls by Mexican leftist Andres Manuel Lopez Obrador. Lopez Obrador, a 64-year-old former mayor of Mexico City, is seen as a populist candidate who says Mexico should reduce its economic dependence on foreign powers, and has vowed to put US President Donald Trump “in his place” if he wins.

    US DOLLAR

    The US Dollar is marginally higher, supported by higher US bond yields and expectations of more rate increases from the Federal Reserve. The Fed’s Beige Book reported activity remained at “a modest to moderate pace” in March and early April, and there were widespread concerns about trade policy.

    BRITISH POUND

    The Pound fell after retail sales posted a much bigger than forecast decline in March, adding to signs of the UK economy struggled in the first quarter in part due to severe weather events. It recovered some of the ground on news that two companies are looking to buy UK pharmaceutical company Shire for £40 billion.

    EURO

    The Euro continues to pivot the 1.23 level, lacking any momentum with investors looking ahead to next week's ECB meeting.  

    CANADIAN DOLLAR

    The Canadian Dollar is holding near a 1-week low versus its US counterpart after the Bank of Canada sounded less confident about the outlook for interest rates yesterday. The Loonie saw only slight gains from an employment report from ADP that showed the economy added 42,800 jobs in March, led by hiring in the construction industry. 

    AUSTRALIAN DOLLAR

    The Australian Dollar is lower across the board after the latest employment report showed just 4,900 new jobs were added last month, whilst February's figures were revised to show a 6,300 fall rather than the original 17,500 increases. The unemployment rate did, however, drop to 5.5% as expected.

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