After inflation data, Mexican peso slips

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The U.S. dollar took a breather, while Mexico’s peso slipped as falling inflation strengthened the case for the central bank to slow its pace of interest rate hikes.

The dollar fell 0.4% after hitting over three-month highs on Wednesday, underpinned by U.S. Federal Reserve Chair Jerome Powell’s message that interest rates will have to go higher and possibly faster than investors previously anticipated.

The greenback fell after data showed initial jobless claims rose 21,000 to a seasonally adjusted 211,000 for the week ended March 4. The figure was well above a Reuters estimate for 195,000, assuaging fears that the U.S. labor market is too tight.

The Mexican peso slipped 0.3% as data showed core consumer prices slowed more than expected in the year to February.

“Today’s (inflation) print reduces the odds that (central bank) chooses to go ahead with a 50 bps hike, though incoming data as well as the outlook for the Fed remain key influences on the bank’s decision,” Scotiabank economists said in a note.

Source: El Financiero

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