Mexican Peso Nears 17 Per Dollar Mark

The Mexican peso closed at 16.99 units per dollar on 10 September, according to data from Banco de México. The currency lost 9 centavos compared with its close on Wednesday 9 September, briefly nearing the 17.00 mark during the session. At commercial bank Banamex, the dollar was quoted at 16.41 pesos for purchase and 17.38 pesos for sale.

The move followed US producer price data showing wholesale inflation rose 0.4% in August month-on-month, marking its largest increase since May. Year-on-year, US producer prices advanced 5.4%. The print heightened expectations of an interest rate increase at next week's Federal Reserve meeting, ahead of US consumer price index data that is expected to reflect higher gasoline prices.

Felipe Mendoza, market analyst at EBC Financial Group, noted that Mexican industrial production and the US consumer price reading could generate volatility. Mendoza indicated that a higher-than-expected US inflation figure could push the exchange rate up to 17.08 pesos per dollar.

In sovereign debt markets, the US 10-year Treasury yield stood at 4.92%, while the Mexican 10-year bond yield remained at 9.35%. Across emerging-market currencies, the Chilean peso recorded the largest drop against the greenback on 10 September, sliding 1.45%. It was followed by declines in the South African rand of 1.04%, the Hungarian forint of 0.51%, the Polish zloty of 0.50%, and the Peruvian sol of 0.50%.