The Mexican peso ended the Friday’s trading session with losses as Brazil’s budget deficit widened to a record, increasing chances for a credit rating downgrade. The currency dropped even as the central bank refrained from an interest rate cut.
The Bank of Mexico left its main interest rate at 3 percent yesterday, and analysts believe that the central bank will not change its monetary policy anytime soon. The central bank has a difficult task balancing between failing economic growth and surging inflation, and any change has a potential to make the already bad situation even worse. The Mexican currency is not particularly attractive for investors as a result of all the problems the country’s economy faces.
USD/MXN rose from 13.4399 to close at 13.4787.
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