The Pound Mexican Peso (GBP/MXN) rose by 0.8% today and is currently trading around Mex$ 24.0719 on the interbank market.
The Mexican Peso (MXN) plummeted following the resignation of the Mexican Finance Minister Carlos Urzua.
Mr Urzua resigned with little positive to say about Mexican economic policy.
‘I am convinced that all economic policy should be realized based on evidence. However, during my tenure these convictions were not echoed.’
Edward Glossop, a Latin America Economist at Capital Economics, said in a note:
‘The resignation hints at broader divisions building within government. Urzua’s resignation suggests that there may still be some within government who favour looser fiscal policy. In short, while Amlo has so far kept investors onside, cracks might now start to be appearing.’
This was compounded by yesterday’s fall in Mexican inflation figures, providing further downwards pressure on the MXN/GBP exchange rate.
Edward Glossop added:
‘The large drop in Mexican inflation ... is likely to be followed by another sizeable fall this month.’
The Pound, meanwhile, rose against the Mexican Peso following the printing of the UK growth figures for May.
These confirmed consensus and rose from -0.4% to 0.3%.
Rob Kent-Smith, the Head of GDP at the Office for National Statistics (ONS), said:
‘GDP grew moderately in the latest three months, with IT, communications and retail showing strength.’
Today also saw the UK manufacturing and industrial production figures improve in May, however these both missed consensus and left some Sterling traders feeling jittery.
Brexit remains in focus following last night’s debate between the two Tory leadership candidates Boris Johnson and Foreign Secretary Jeremy Hunt.
Mr Johnson called it an ‘absurdity’ to take a no-deal Brexit off the table, further supporting his motion to suspend Parliament to force a no-deal through.
The GBP/MXN exchange rate could ease tomorrow if the Bank of England’s financial stability report indicates a weakening UK economy.