Mexican Peso is virtually unchanged as Mexico's Retail Sales decline hints at economic pressure.
Recent data may influence Banxico's rate decisions amidst reduced consumer spending reports.
Investors' focus shifts to FOMC Minutes for insight into the Fed's rate trajectory and its impact on MXN.
The Mexican Peso (MXN) stays firm against the US Dollar (USD) even though data from Mexico suggests that consumers are spending less, which should weigh on the economy’s outlook. That capped the Peso’s advance while traders awaited the release of the latest Federal Reserve (Fed) meeting Minutes. At the time of writing, the USD/MXN exchanges hands at 17.05, unchanged.
Mexico’s National Statistics Agency revealed that Retail Sales plunged in December, in both monthly and annual figures, an indication that consumers are feeling the pain of higher interest rates set by the Bank of Mexico (Banxico). Today’s data summed to Monday’s Indicator of Economic Activity (IOAE), suggesting the economy shrank -0.7% MoM in January, which could weigh on Banxico’s decision to lower rates at the March meeting.
USD/MXN traders are eyeing the release of the Federal Open Market Committee (FOMC) January Minutes, which are not expected to rock the boat sharply. After the monetary policy statement release last month, Fed Chair Jerome Powell threw cold water on a rate cut in March, while most policymakers commented that the Fed is in no rush to cut rates
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