Mexican Peso hits weekly high of 16.90 versus USD after Fed maintains current policy.
The Mexican currency stays strong despite lower Mexico Business Confidence.
US economic data showing a smaller trade deficit and stable job claims, failed to boost the Greenback.
Powell states Fed's future policy decisions will be made “meeting by meeting”.
The Mexican Peso prolonged its rally for the second consecutive day on Thursday and hit a new weekly high of 16.90 against the Greenback following the US Federal Reserve's (Fed) decision to keep monetary policy unchanged on Wednesday. Data from the United States (US) revealed that the trade deficit narrowed, while the number of Americans filing for unemployment claims remained unchanged. The USD/MXN trades at 16.92, down by 0.42%.
Mexico’s economic docket revealed that April’s Business Confidence deteriorated. However, the Mexican currency remained strong against the US Dollar, following the Fed’s decision to keep rates unchanged due to the “lack of progress” on the disinflation process.
Fed Chair Jerome Powell added that it wouldn’t be appropriate to ease policy until they gather confidence that inflation is trending toward the 2% goal. He added they – the Fed – would remain data dependent and that the upcoming monetary policy decision would be decided “meeting by meeting.”
Powell said the Fed’s belief that monetary policy is sufficiently restrictive to curb inflation and disregarded the potential of hiking rates when he asked.
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