Puerto Vallarta, Mexico – The Mexican peso concluded trading on Monday slightly weaker against the U.S. dollar, after initially gaining ground following the release of local inflation data. The currency’s retreat was attributed to investor speculation regarding upcoming interest rate cuts from the Bank of Mexico (Banxico).
At the close of the session, the peso stood at 20.2004 units per dollar, according to official figures from Banxico. Compared to Friday’s level of 20.1793 units, Monday’s figure represents a decline of 2.11 cents, or 0.11%. During the day, the dollar traded within a range, reaching a high of 20.2160 units and a low of 20.1106.
Meanwhile, the Intercontinental Exchange Dollar Index (DXY), which measures the U.S. dollar’s value against a basket of six major currencies, gained 0.12%, reaching 106.18 points.
Market sentiment was initially buoyed by data from Mexico’s National Institute of Statistics and Geography (Inegi) indicating that the National Consumer Price Index (INPC) rose by 0.44% in the latest reporting period, translating into an annual increase of 4.55%. The underlying index, which strips out the more volatile price components, rose just 0.05%.
Financial firm Invex noted that the downward trajectory of core inflation could open the door for Banxico to lower borrowing costs. “As the underlying inflation figure continues on a downward path, we anticipate that the Board of Governors of the Bank of Mexico will cut the reference rate by 25 basis points in its decision this month,” the firm stated.
Banxico is scheduled to announce its December policy decision on Thursday, following the U.S. Federal Reserve’s announcement a day earlier. While investors widely expect Banxico to initiate a 25 bp reduction, the market remains attentive to upcoming U.S. inflation data on Wednesday, which could influence the Fed’s approach and potentially shape the outlook for the peso in the near term.
Puerto Vallarta, Mexico - The Mexican peso concluded trading on Monday slightly weaker against the U.S. dollar, after initially gaining ground following the release of local inflation data. The currency’s retreat was attributed to investor speculation regarding upcoming interest rate cuts from the Bank of Mexico (Banxico).
