GBP/MXN Exchange Rate Falls despite Disappointing Mexican Industrial Output
The Pound Mexican Peso (GBP/MXN) exchange rate is down today and is currently trading around Mex$24.6592 on the inter-bank market.
The Pound (GBP) failed to gain against the Mexican Peso (MXN) today, despite Mexican industrial output figures for December falling below expectation by -2.5%.
The Mexican Peso has been under continuing pressure over concerns about the oil company Petroleos Mexicanos (Pemex), which was thrown a lifeline of $3.5bn of tax cuts last week, but is showing continuing signs of a decline.
This was followed by López Obrador, the President of Mexico, calling for ‘Franciscan poverty’ in which he was willing to transfer funds to the people, which has caused a clash with the courts with the threat of laying off 70% of non-unionized federal workers.
‘[Public servants should] devote themselves to work assiduously while resigning to live in … honorable modesty.’
GBP/MXN Hit by Poor UK GDP Figures
Sterling suffered today following the printing of the UK GDP figures for the fourth-quarter, which slipped to 0.2%, causing some concern for Pound traders as the UK begins to show signs of slowing.
These were accompanied by poor monthly GDP figures for December, which decreased to a worse-than-expected -0.4%.
Suren Thiru, the head of economics at the British Chambers of Commerce, said:
‘It is increasingly likely that the slowdown at the end of 2018 will persist as continued Brexit uncertainty and the raised possibility of a no-deal exit from the EU weigh heavily on UK’s growth prospects.’
These were followed by the UK manufacturing production figures for December, which fell below expectation.
GBP/MXN Exchange Rate Struggles despite UK No-Deal Challenged by Both Parties
In Brexit news, Prime Minister Theresa May has agreed to engage in further discussions with the opposition leader, Jeremy Corbyn, after responding to his letter on Sunday.
Theresa May tweeted:
My response to @jeremycorbyn’s letter on Brexit where he commits to secure a deal – rather than a second referendum or general election.
But I have also asked why he seeks a say in EU trade deals, rather than pursuing our own independent trade deals outside a customs union. pic.twitter.com/0uDzKIlGDu
— Theresa May (@theresa_may) February 11, 2019
GBP traders are paying particular focus to any signs of a breaking of the Brexit deadlock, and with both parties agreeing in principal on avoiding a no-deal, some confidence has returned to the Pound.
Rory Stewart, the Conservative Justice Minister echoed these signs of returning optimism, commenting:
‘[T]here isn’t actually as much dividing us from the Labour Party as some people suggest.’
GBP/MXN Outlook: Brexit Discussions Remain in Focus
GBP traders will be looking ahead to a speech by the Governor of the Bank of England, Mark Carney, tomorrow, and with any comments that indicate a slowing UK economy we could see Sterling fall further against the Mexican Peso.
Many Sterling investors will also be looking ahead to Wednesday, which will see the publication of the UK CPI figures for January.
There are no other notable Mexican economic data releases expected this week, with many Mexican Peso traders instead focusing on political factors – domestic and global – driving the MXN/GBP exchange rate.
The GBP/MXN exchange rate, however, is expected to be influenced by Brexit news this week, and with any signs that Theresa May could extend the Brexit process is likely to see Sterling benefit.