Pound to Mexican Peso Exchange Rate Holds Ground amid Global Trade Jitters
Despite hopes that US-Mexico trade tensions would lighten and trade relations in North America would improve, the Pound Sterling to Mexican Peso (GBP/MXN) exchange rate has sustained gains over the past week and remains resilient today.
After opening last week at the level of 24.11, GBP/MXN slipped and briefly touched on a fresh 10-month-low of 23.86 before rebounding and closing the week closer to the level of 24.35.
This week’s GBP/MXN movement has been mixed due to weakness in both currencies, but the pair did touch on a fresh high of 24.39. This was the best level for the pair in almost two weeks.
Political uncertainties have been weighing on the Pound (GBP), while the Mexican Peso (MXN) is less appealing due to global trade uncertainties such as US trade protectionism.
Pound (GBP) Exchange Rates Struggle to Advance amid Latest Political and Brexit Jitters
Trade jitters have been weighing heavily on the Mexican Peso, but the Pound has struggled to continue advancing against the weakened Peso today due to the latest UK political uncertainties weighing on Sterling.
The first stages of the Conservative Party’s leadership contest have ended with two remaining candidates: frontrunner Boris Johnson and runner-up Jeremy Hunt.
Johnson’s lead among MP votes is significant, but his popularity has not lightened uncertainty much for the Pound outlook as he has a harder stance on Brexit compared to UK Prime Minister Theresa May.
Over the weekend, uncertainty about the possibility of a Johnson leadership deepened as it was reported that the police had been called over a row between Johnson and his partner.
Uncertainty about the future of Britain’s government, as well as last week’s less hawkish than expected Bank of England (BoE) policy decision, limited the Pound’s appeal.
Mexican Peso (MXN) Exchange Rate Appeal Damp Ahead of G20 Summit
While hopes are rising that trade tensions between the US and Mexico will lighten and the trade situation in North America will smoothen out, investors are still hesitant to buy the Mexican Peso lately.
The Mexican Peso is a currency that is typically correlated to movement in emerging market assets, and as a result has been unappealing due to ongoing US trade protectionism and trade war fears.
With the US expected to hold key meetings over its trade stances at this week’s G20 summit in Osaka, particularly with China, the trade-correlated Mexican Peso is vulnerable.
Investors are also hesitant to move much on the Peso ahead of this week’s upcoming Mexican data.
Pound to Mexican Peso (GBP/MXN) Exchange Rate Anticipates Mexican Data and G20 Summit
Pound investors are focused on the ongoing Conservative Party leadership contest, so unless there are any notable developments here the Pound to Mexican Peso (GBP/MXN) exchange rate is more likely to be influenced by Peso movement.
With notable Mexican data due in the coming sessions, and the highly anticipated G20 Summit in Osaka beginning on Friday, there may be plenty of news for Mexican Peso investors to digest this week.
This afternoon will kick off the economic calendar with Mexico’s mid-month inflation rate report for June, and April’s economic activity.
Mexican retail sales from April will follow tomorrow, with trade balance and unemployment stats on Wednesday.
However, Thursday’s Bank of Mexico policy decision could be the most influential item on the economic calendar this week.
Mexican news is most likely to influence the Pound to Mexican Peso (GBP/MXN) exchange rate’s movement ahead of Friday’s G20 Summit, unless there are notable UK political developments.