Mexican Peso Fall as Trump Says ‘Not Nearly Enough’ Progress Made in Talks
The Mexican Peso fell on Thursday in Asia after U.S. President Donald Trump said there was “not nearly enough” progress made in the latest discussion between U.S. and Mexican officials.
His comments raised the likelihood that Washington will follow through with previously announced tariffs next week.
“If no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule,” Trump tweeted Wednesday. “The higher the Tariffs go, the higher the number of companies that will move back to the USA!”
The two sides are set to resume talks later in the day.
The USD/MXN pair rose 1.0% to 19.7636 by 11:50 PM ET (03:50 GMT).
Meanwhile, the U.S. dollar index that tracks the greenback against a basket of other currencies was little changed at 97.232.
The private sector added the fewest jobs in any month since 2010, data from ADP (NASDAQ:ADP) showed. The 27,000 jobs created in May were well below estimates.
The ADP figures are ahead of the more comprehensive government payrolls report on Friday, with analysts expecting it to show jobless rates at 3.6% a 49-year low.
Finance ministers and central bank governors from the G-20 nations gather in Fukuoka, Japan this weekend. U.S. Treasury Secretary Steven Mnuchin is set to meet with the People’s Bank of China governor Yi Gang during the gathering, the Treasury Department said on Tuesday night.
The USD/CNY pair was up 0.1% to 6.9117.
The People’s Bank of China is likely to cut rate twice before the end of 2019 and once in in 2020, said Helen Qiao, chief Greater China economist at Bank of America Merrill Lynch (NYSE:BAC), in an interview with CNBC, adding that the central bank could cut rates even more than twice if trade relations with the U.S. continue to worsen.
“The next 25% batch of tariffs on $200 billion (of Chinese goods) would be actually much more severe in terms of the pain it could inflict on the overall growth,” said Qiao, who also believes the U.S. Federal Reserve will slash rates in September and December this year.
The EUR/USD pair traded 0.1% higher to 1.1230. The European Central Bank will make its monetary policy decision later on Thursday. Mario Draghi, President of the central bank, is expected to maintain guidance about the possibility of more stimulus.
The GBP/USD pair inched up 0.1% to 1.2687. U.K. Prime Minister Theresa May will step down as leader of the Conservative Party on Friday.