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Pound to Mexican Peso Exchange Rate Falls as Mexican Investment Figures Sink

April 8, 2019 - Written by John Cameron

The Pound Mexican Peso (GBP/MXN) exchange rate is down today and is currently trading around Mex$24.8208 on the inter-bank market.

The Mexican Peso (MXN) gained against Sterling (GBP) today despite the publication of the Mexican gross fixed investment figures for January, which fell by -0.7%.

The year-on-year gross fixed investment figures, meanwhile, plummeted by -6.8%, weighing on market confidence in MXN.

News that the US President Trump would impose a 25% tariff on cars made south of the Mexican border have weighed on sentiment in the Mexican Peso.

However, the White House Economic adviser, Larry Kudlow, said:

‘Regarding the threat of tariffs, (the) President believes that the border issue, the border security, the wall, the breakdown in immigration are very important issues… He is not about to do it. He has pulled back a wee bit. He's just issuing a warning, and if you know this President as I do, you better listen to him.’

GBP/MXN Exchange Rate Falls as No-Deal Brexit Continues to Haunt UK Markets

Sterling, meanwhile, has failed to benefit from a more relaxed approach from Prime Minister Theresa May, who, in a strikingly informal address yesterday, appeared optimistic that cross-party talks could potentially resolve the Brexit deadlock.

Sir Keir Starmer, the Shadow Brexit Secretary, has left many Pound traders feeling jittery, however, as cross-party talks appear to have been only cursory.

Starmer said:

‘All they have done so far is to indicate various things but not to change the political declaration, so the ball is in the government’s court.’

As the Brexit leaving data is drawing ever closer on the 12 April, uncertainty surrounding developments both domestically, and between the UK and the EU, have left many Pound traders feeling cautious today.

However, Theresa May will be asking French President Emmanuel Macron tomorrow, along with Angela Merkel, for a short extension to Brexit.

A spokeswoman for Theresa May commented:

‘This is obviously a unique European council specifically focused on Brexit. The PM set out a clear ask in terms of an extension and it is important that she set out the rationale for that.’

GBP/MXN Forecast: Sterling Could Soar if a No-Deal Brexit Recedes

Mexican Peso traders will be awaiting tomorrow’s release of the Mexican inflation rate figures, and with any signs of improvement this provide some uplift for the MXN/GBP exchange rate.

Later on this week, on Thursday, MXN investors will be paying close attention to the release of the monetary policy meeting minutes by The Central Bank of Mexico.

Sterling traders will be looking ahead to tomorrow’s UK manufacturing production figures for February.

The GBP/MXN trade rate will remain dictated by Brexit developments tomorrow, and with any signs of a possible extension to Brexit, this could see Sterling soar as a no-deal Brexit recedes.

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