The Mexican Peso continued its downward trajectory on Thursday, driven by a combination of factors, including threats from former US President Donald Trump, a slowdown in economic activity, political risks, and deteriorating consumer confidence.
The release of stronger-than-expected US retail sales data further fueled the rally in USD/MXN, pushing it closer to the key psychological barrier of 20.00.
Key Factors Weighing on the Peso:
- Trump’s Threats: Donald Trump’s threat to impose tariffs on Mexican auto imports has negatively impacted the Peso.
- IMF Forecast: The IMF’s forecast of a slowdown in Mexican economic growth has contributed to the Peso’s weakness.
- Political Risks: Political instability and the controversial judicial reform have also weighed on the Peso.
- Consumer Confidence: Deteriorating consumer confidence has further dampened the Peso’s outlook.
Expected Rate Cuts: The Bank of Mexico is anticipated to cut interest rates multiple times before the end of the year, which could further weaken the Peso.
