Left Menu
Development News Edition

FOREX-Peso surges on U.S.-Mexico deal, euro sags

Reuters | Updated: 10-06-2019 13:39 IST | Created: 10-06-2019 13:16 IST
FOREX-Peso surges on U.S.-Mexico deal, euro sags
Image Credit: Pixabay

The Mexican peso surged more than 2% on Monday after the United States and Mexico struck a deal on migration to avert a trade tariff war, supporting a rebound in investor risk appetite that boosted the dollar and knocked the safe-haven yen lower.

Foreign exchange investors had rushed for the safety of the Japanese yen in recent weeks after U.S. President Donald Trump's threat to slap tariffs on Mexico shook investor confidence. On Monday, the dollar staged a recovery as investors dumped the yen and euro. Some analysts said the U.S. currency should rebound as investors realised their assessment of the path for Federal Reserve interest rate cuts was overly dovish.

The dollar's index rallied 0.3% to 96.824. Against the euro, it rose 0.3% to $1.1304, with the single currency also under pressure after sources told Reuters that European Central Bank policymakers were open to cutting rates if economic growth weakened. The Mexican peso rose more than 2% to 19.2275 pesos per dollar after trading resumed for the first time following Friday's migration agreement.

Trump had threatened to impose 5% import tariffs on all Mexican goods starting on Monday if Mexico did not commit to doing more to tighten its borders. "While we should expect 'risk-on' type trading in the early part of the week, we are very cautious over the sustainability of any rebound in risk appetite," MUFG analysts said in a note, citing caution about Mexico's backing for the deal's details and worries Trump may push other trade disputes.

The yen shed 0.4% to 108.65 after earlier hitting its weakest since late May, though it remains 3.3% stronger than its levels of April. Bart Wakabayashi, Tokyo branch manager at State Street Bank, said the lift to sentiment from the U.S.-Mexico deal would "probably spill over to optimism with China and hopefully some progress there."

"We've had trade talks with the EU, with Japan. Hopefully, these will start to turn to the positive narrative," he said. The yuan brushed its lowest since late November after weak import data that reignited worries about slowing Chinese domestic demand. The offshore rate was slightly lower at 6.9488 yuan per dollar but held above Friday's low.

The euro pulled back from 2-1/2 month highs hit on Friday in the wake of an ECB meeting that investors viewed as less dovish than expected. The ECB did not - as some had anticipated - hint at rate cuts in the face of a deteriorating economic outlook, instead of saying that rates would stay "at their present levels" until mid-2020.

But on Sunday two sources told Reuters that policymakers were open to cutting the ECB's policy rate again if economic growth weakened and a strong euro hurt the bloc. Sterling was caught by the dollar's recovery, losing 0.2% to $1.2709.



Why COVID-19 is unstoppable in USA despite it being ranked at the top of GHS Index?

Several worst-hit countries such as Italy, France, Spain, the UK, Canada, and Russia have peaked COVID-19 cases in April. Almost all of them have gradually flattened the curve. However, the USA is setting new daily records of infections tha...

COVID-19 seems cooking biggest ever global scam

The increasing number of corruption cases on COVID-19 funds from throughout the world and involvement of high profile persons indicate that the countries cant ignore corruption in their pandemic response programs. This has generated the nee...

Health Management Information Systems lack holistic, integrated, and pandemic resilient character

Being a part of the United Nations system, the World Health Organization WHO deserves its share of rebuke for its alleged failure issue COVID-19 health emergency alerts on appropriate time. However, the pandemic has also exposed loopholes i...

Pride in the time of coronavirus: a welcome move online?

This year is different in many ways not least as celebrations are also taking place against the dramatic backdrop of a global health crisis and a resurgence in grassroots activism following the death of George Floyd in Minneapolis. ...


Latest News

Johansson will 'hand the baton' to Pugh in 'Black Widow': director Cate Shortland

Hollywood star Scarlett Johansson will hand over the baton to actor Florence Pugh in the much-anticipated Marvel Studios movie Black Widow. According to director Cate Shortland, the prequel, set before the events of 2019 tentpole Avengers E...

World Bank approves $425 million to support infrastructure financing in Africa

The World Bank Board of Directors approved today a total amount of 425 million in International Development Association IDA financing to support the provision of infrastructure finance in Eastern and Southern Africa. The Regional Infrastruc...

FC Goa sign goalkeepers Coelho, Bhonsle for developmental side

Indian Super League ISL team FC Goa has signed up young goalkeepers Hansel Coelho and Viddhesh Bhonsle to bolster their developmental side. As per the agreement, the duo will be part of FC Goa developmental team 2022-23 season.The duo impre...

Millennial Money: Lessons learned while sheltering at home

Shelter in place. Lockdown. Quarantine. Whatever you call it, its been a few months since the COVID-19 pandemic taught us what staying home for an extended period of time actually looks and feels like.These are unprecedented times. And alth...

Give Feedback