FX.co ★ Mexican Peso Steady After GDP Data

The Mexican peso maintained a position around 19.60 against the US dollar, staying close to its highest value in over six months, as investors evaluated recent growth figures. The Mexican economy successfully sidestepped a technical recession, posting a preliminary GDP growth of 0.2% for the first quarter, surpassing the anticipated stagnation and recovering from the previous quarter’s 0.6% decline. While this modest quarter-over-quarter growth was sufficient to prevent a technical recession, it does little to change the overarching narrative of economic vulnerability. The nation’s economic outlook remains shrouded in uncertainty due to high domestic unpredictability, stringent financial conditions, and continuing susceptibility to the consequences of the U.S. trade war. Earlier statistics indicated unemployment fell to a historic low of 2.2% in March, while core inflation rose to 3.9% in mid-April. These figures bolster expectations that Banxico might pause its rate-cutting cycle, helping to maintain a significant real-rate differential, which continues to attract substantial carry-trade investments.