The Mexican peso snapped a four-day winning streak on Tuesday after data showed its economy grew less than expected in February and a stronger dollar weighed on currencies of commodity-heavy Latin America.
The peso eased 0.4% against the greenback by 1450 GMT after data showed Mexico’s economy grew 0.1% in February from January and expanded 3.8% from February of 2022, missing analyst estimates. “Their manufacturing is now under stress because of the U.S.’s weakening industrial sector. We also believe that the tight financial conditions and relatively high inflation will put a lid on the services economy,” said Andres Abadia, chief Latam economist at Pantheon Macroeconomics.
“Overall, the growth momentum will start to ease over the next few months but it won’t collapse, it is just a normal slowdown.” Overall, the MSCI’s index for Latin American currencies slipped 0.1%, as the US dollar index headed for its best day in over a week amid deepening worries about earnings and the outlook for the global economy.