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USD/MXN Rebounds From Two-Week Low As Investors Monitor AMLO’s COVID-19 Condition

The Mexican peso is rebounding from its two-week low against the US dollar on Tuesday, breaking below the 20.00 level. The peso struggled to kick off the trading week as President Andres Manuel Lopez Obrador tested positive for the coronavirus…

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The Mexican peso is rebounding from its two-week low against the US dollar on Tuesday, breaking below the 20.00 level. The peso struggled to kick off the trading week as President Andres Manuel Lopez Obrador tested positive for the coronavirus in a country that has seen the seven-day average of new infections top 17,000. Mixed economic data weighed on the currency, too.

In November, retail sales advanced 3.3%, up from the 0.2% drop in October. The retail trade has expanded for six of the last seven months, following the 22% collapse in April. On an annual basis, retail sales slumped 5.1% in November for the ninth straight month.

On Monday, the government reported that economic activity rose 0.9% in November, beating the market forecast of 0.3%. But it was down from the 1.2% gain in October. Economic activity was still down 3.9% year-over-year, with declines in output and secondary activities.

On Friday, the gross domestic product (GDP) reading for the fourth quarter will be released. It is forecast that the GDP expanded 2.8% during the October-to-December period. Year-over-year, the Q4 GDP is projected to slide 5.5%.

This comes soon after Goldman Sachs released its forecast for the Mexican economy in 2021, projecting that the recovery would continue this year. JP Morgan Chase analysts also believed that some “cyclical juice” was still left in the emerging market trade, including in Mexico and Colombia.

For now, foreign exchange markets are monitoring AMLO’s health condition. Over the weekend, the Mexican president revealed that his symptoms are “mild” and that he is undergoing medical treatment. He tweeted:

I regret to inform you that I am infected with COVID-19. The symptoms are mild but I am already under medical treatment. As always, I am optimistic. We will all move forward.

According to the latest numbers, Mexico confirmed more than 8,500 cases of COVID-19, bringing the seven-day average to 17,463. In total, Mexico has reported 1.77 million cases, with a death toll of 150,000. The country has hardly imposed lockdowns and restrictions throughout the pandemic, with the economy relatively unfazed by the global public health crisis.

The USD/MXN currency pair fell 0.57% to 19.9985, from an opening of 20.1133, at 14:55 GMT on Tuesday. The EUR/MXN dropped 0.34% to 24.3356, from an opening of 24.4232.


© AndrewMoran for Forex News, 2021. |
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