Mexican Peso temporarily weakens after release of Manufacturing PMI

The Mexican Peso weakened temporarily on Thursday after the release of the S&P Global Manufacturing PMI for Mexico. The survey of purchasing managers in the Manufacturing sector showed a fall to 51.0 in April, down from 52.2 in March and 52.3 in February. It was the third monthly decline in a row, although the metric remains in expansive territory (above 50) – and at historic highs for the Index.  

Fierce competition from rival firms in China and weak overseas demand were seen as major factors in the slowdown. 

“A renewed fall in production volumes is a strong indication of how detrimental competitive conditions and weak international sales were to Mexican manufacturers at the start of the second quarter,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.

The fall in overseas demand was offset to a certain degree by continued robust domestic demand.

“Mexico's domestic market fared better in comparison, neutralizing the weakness in overseas demand. Total new orders rose for the third consecutive month in April, amid

reports of successful advertising, demand resilience and the upcoming elections,” the report said.