Anna 
The Mexican Peso (MXN) reached nine-year highs against the US Dollar (USD) on Friday, showcasing resilience even amid a brief retreat following the release of robust US Nonfarm Payrolls data that bolstered the USD.
MXN’s notable appreciation follows the publication of Banco de Mexico’s (Banxico) March meeting minutes and a surge in Crude Oil prices, a crucial export for Mexico. Banxico’s minutes revealed some policymakers’ reluctance to embrace an easing cycle, citing persistent inflation as a deterrent to committing to future interest rate cuts.
Mexico’s current interest rates, standing at 11.00%, contribute to MXN’s strength by attracting higher foreign capital inflows. Additionally, the uptick in crude oil prices, with Brent crude surpassing $90 a barrel on Friday, further buoyed the Mexican Peso given its significant export role.
Despite the better-than-expected US Nonfarm Payrolls (NFP) data, which showed a surprising increase of 303,000 jobs in March and a decline in the Unemployment Rate to 3.8%, the USD/MXN pair received only transient support. The data cast doubt on previous expectations of a Federal Reserve interest rate cut in June.
Mexican Peso Supported by Banxico’s Hawkish Tone
The MXN found support and rebounded following the release of Banxico’s March meeting minutes. While the majority of members favored a 0.25% interest rate cut to 11.00%, policymaker Irene Espinosa dissented, reflecting a hawkish stance within Banxico.
