Mexican Peso slumps after Mexico Retail Sales miss the mark
|- The Mexican Peso shed 1.8% against the Greenback on Tuesday.
- Mexico saw a much steeper contraction in Retail Sales than expected.
- Markets are looking for signs of Fedspeak ahead of Jackson Hole.
The Mexican Peso (MXN) took a step back against the US Dollar on Tuesday after a miss in Mexican Retail Sales. Markets continue to tilt towards the Jackson Hole Economic Symposium later this week, looking for signs of a Federal Reserve (Fed) rate cut in September.
Daily digest market movers: Mexico Retail Sales sputter sends Peso lower
- Mexico reported a wide miss in Retail Sales, which contracted twice as much as expected in June.
- Mexican Retail Sales contracted 3.9% for the year ended in June, far below the forecast -1.8% and tumbling back from the previous month’s 0.3% uptick.
- MoM Mexico Retail Sales also fell back 0.5%, underperforming the previous print of 0.1%.
- Fedspeak will have a pronounced impact on market flows in the coming days as investors gear up for the Jackson Hole kickoff on Thursday.
- Global markets are broadly expecting the Fed to jumpstart a rate cutting cycle with at least a quarter-point rate trim on September 18.
Mexican Peso price forecast: USD/MXN jumps on Peso weakness
USD/MXN chalked in a 1.8% upswing on Tuesday as the Peso stumbles against the Greenback. Despite a broad-market pullback in the US Dollar Index, USD/MMXN is still finding higher ground and testing beyond the 19.00 handle.
With the pair poised for a near-term upswing, bidders are looking to extend topside momentum and mark in another higher lower on daily candlesticks.
USD/MXN daily chart
Economic Indicator
Retail Sales (MoM)
The Retail Sales released by INEGI measures the total receipts of retail stores. Monthly percent changues reflect the rate of changes of such sales. Changes in retail sales are widely followed as an indicator of consumer spending. Generally speaking, a high reading is seen as positive or bullish for the Mexican peso, while a low reading is seen as negative or bearish.
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