Mexican Peso slumps as Fed holds rates, as Powell’s disregard March rate cut

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• Mexican Peso falls over 0.20% against the US Dollar, in response to the Fed’s decision to hold rates and a cautious tone from Chair Powell.
• Powell’s balanced approach and dismissal of a March rate cut weakens the Peso against the USD.
• The Fed’s commitment to reducing its balance sheet as planned and a meeting-by-meeting approach to rate decisions
• Fed’s unanimous decision to maintain interest rates and cautious approach to future rate cuts heightens market risk aversion.
• US employment data and a low Employment Cost Index shows the labor market is cooling.

The Mexican Peso (MXN) edges lower against the US Dollar (USD) on Wednesday and posted losses of more than 0.20% as risk aversion drove the financial markets after the US Federal Reserve (Fed) decided to hold rates, but stroke a hawkish stance. In addition, Fed Chair Jerome Powell was balanced and poured cold water on market participants expecting a March rate cut. Therefore, the USD/MXN trades at 17.20 after hitting a daily low of 17.09.