Mexican Peso Gains Amid Economic Data and Trade Tensions…

CIUDAD DE MÉXICO, 24 abr (Reuters) – The Mexican peso appreciated on Thursday following strong economic data, while the stock market aimed for its seventh consecutive day of gains. Investors are awaiting news on the progress of the trade conflict between China and the United States.

The peso traded at 19.5660 units, up 0.24% from the previous day’s reference price from LSEG. It briefly strengthened to 19.4640 pesos, a level not seen since October last year.

“We are at an important floor,” said Humberto Calzada, chief economist at Rankia Latinoamérica. “It is difficult to know if it will continue to appreciate; many issues are still ahead. We know the personality of President Donald Trump, and any decision could continue to provoke international volatility, which would affect the peso,” he added.

Locally, the inflation rate rose in the first half of April but remained within the official target. This supports expectations that the central bank will continue to cut the benchmark rate amid weak economic forecasts due to the global trade war.

Firms like Citi warned that Mexico may have fallen into a technical recession in the first quarter. However, President Claudia Sheinbaum dismissed claims on Thursday that the country is facing an economic contraction. GDP data for March will be released next week.

“For now, markets are already factoring in weak GDP data. However, if we see a stronger decline than anticipated, we might see a rebound of the peso towards the high 19s or 20s against the dollar,” Calzada explained.

The benchmark S&P/BMV IPC index rose 1.16% to 56,412.09 points, hovering around its highest levels since May, with a cumulative return of 9.5% over the past seven sessions.

Gentera, a credit services firm, led Thursday’s gains with a 5.98% increase to 36 pesos after releasing a strong first-quarter report.

“The results support our vision of a defensive business profile despite the context of deceleration. This is coupled with the expectation of lower funding costs due to a scenario of lower interest rates, leading to higher earnings,” said Grupo Financiero Banorte.

Shares of the former conglomerate Alfa, now focused on its food business, also increased by 5.75% to 14.16 pesos following its quarterly report.

In the secondary debt market, the yield on the 10-year bond remained unchanged from its previous close at 9.45%, while the 20-year rate dropped by 10 basis points to 10.06%.