Mexican Peso gains despite Moody’s negative outlook

Mexican Peso appreciates and shrugs off bad credit outlook review, strong US data.

Moody's revises Mexico’s credit outlook to negative, citing concerns over judicial changes impacting economic stability.

Peso strengthens in spite of Banxico’s rate cut with inflation expectations remaining above target.

The Mexican Peso recovered some ground against the US Dollar during the North American session, shrugging off Moody’s adjustment on Mexico’s credit outlook and upbeat US Retail Sales data. At the time of writing, the USD/MXN trades at 20.34, down by 0.24%.

Due to recent constitutional changes, Moody’s Ratings changed the Mexico’s credit outlook from stable to negative.

“The constitutional overhaul risks eroding checks and balances of the country’s judiciary system, with potential negative impact to Mexico’s economic and fiscal strength,” Moody’s said in a statement Thursday.

Other ratings agencies, like Fitch and S&P Global, kept Mexico’s creditworthiness stable. Fitch Ratings assigns Mexico BBB-, the lowest level above junk, while S&P Global Ratings has it a notch higher.

In the meantime, the Minister of Finance, Rogelio Ramirez de la O, presented the 2025 economic package at the Chamber of Deputies. The package projections hint that the economy will grow by 2% to 3%, and the fiscal deficit will be 3.9% of the Gross Domestic Product (GDP) for 2025.