The Mexican peso is strengthening against its US counterpart to kick off the holiday-shortened trading week. The peso has been performing well over the last month, sliding below the crucial 20.00 threshold, despite disappointing economic data. Can the peso maintain the momentum in the final few months of 2021? For now, investors are combing through some of the latest numbers.
In August, the nation’s automobile production tumbled 21.4% year-over-year to a little more than 237,000. In the first eight months of the year, total car output advanced 13.3% to 2.05 million units. Mexico’s auto sector has been on a downward trend since recovering in late 2020.
On an annualised basis, vehicle exports plummeted 19.6% in August to around 212,000 units. Mexican shipments slumped from General Motors, Volkswagen, Toyota, and Audi. But Mexico did report a gain in shipments from Ford Motor and KIA.
For the fourth consecutive month, gross fixed investment advanced 17.1% year-over-year in June, down from the all-time high of 46.5%. Although growth was soft, there were still notable increases in machinery and equipment and construction. Private investment contracted 1.8%.
On a monthly basis, gross fixed investment fell 1.8%.
Officials and investors will be monitoring this week’s August inflation numbers. They are expected to have eased once again following the government’s latest implementation of price controls. The consumer price index (CPI) is forecast to come in at 5.6%, while the core inflation rate, which excludes the volatile food and energy sectors, is projected to total 4.77%.
In other news, President Andres Manuel Lopez Obrador predicted that the economy will grow 6% this year amid rising post-pandemic productivity and growing vaccination rates. It is estimated that two-thirds of the population over 18 have been received the vaccine against COVID-19.
“The fact that we have fewer hospitalisations and, above all, that the mortality rate has been considerably reduced is a very important human achievement,” he said. “But it is also an indicator of the normalisation of the country’s educational, productive and social activity.”
The USD/MXN currency pair dipped 0.13% to 19.8998, from an opening of 19.9253, at 17:40 GMT on Monday. The EUR/MXN declined 0.21% to 23.6219, from an opening of 23.6700.