Peso Rises Against Dollar While Cemex Leads Stock Market Losses

The Mexican peso strengthened against the US dollar on Wednesday morning. This uptick came as traders bet on potential interest rate cuts by the Federal Reserve next week. The peso’s rise followed the release of US inflation data.

The spot exchange rate settled at 20.1554 pesos per dollar. This marked a 1.56 cent or 0.08 percent gain for the peso compared to Tuesday’s official close of 20.1710, as reported by the Bank of Mexico.

The dollar’s trading range spanned from a high of 20.2600 to a low of 20.1427 units. Meanwhile, the US Dollar Index (DXY) held steady at 106.40 points. This index measures the greenback against six major currencies.

November’s US Consumer Price Index (CPI) rose by 2.7% annually after a 0.3% monthly increase. This seven-month high aligned with expectations, bolstering predictions of a Fed rate cut.

CME’s FedWatch tool, which tracks federal funds futures, indicates a 97.9% chance of a 25 basis point rate cut. This would bring the range to 4.25-4.50% at the Fed’s upcoming meeting. However, rates are expected to remain unchanged in January.

CiBanco commented on the market reaction: “Traders are digesting the inflation report, which largely met expectations. They’re considering its impact on the Fed‘s upcoming rate decision. The exchange rate may fluctuate between 20.10 and 20.26.”

Mexican Stock Market Dips as Cemex Leads Losses

Mexican stock exchanges opened lower on Wednesday morning. Local stock indices fell due to profit-taking, diverging from Wall Street’s bullish start following US consumer inflation data.

The S&P/BMV IPC, the Mexican Stock Exchange‘s leading index, dropped 0.52% to 51,110.46 points. The FTSE BIVA, representing the Institutional Stock Exchange, declined 0.49% to 1,038.59 points.

Most stocks in the benchmark index traded down. Cemex led the losses, falling 3.13% to 11.16 pesos. Franchise operator Alsea followed with a 2.41% drop to 45.84 pesos. Orbia Advance rounded out the top three decliners, shedding 2.06% to 18.03 pesos.

VectorAnalysis noted, “After a strong start to the week, the S&P/BMV IPC saw profit-taking, breaking initial support at 51,800. The key resistance at the 200-day moving average of 52,640 points was expected to halt the upward trend.”