Puerto Vallarta, Mexico – The Mexican peso strengthened against the US dollar on Wednesday morning, buoyed by lower-than-expected inflation data in the United States and the implementation of new US tariffs on steel and aluminum imports.
According to official data from the Bank of Mexico (Banxico), the spot exchange rate stands at 20.17 pesos per dollar, marking an appreciation from yesterday’s closing price of 20.25 pesos per dollar. During the session, the exchange rate has fluctuated between a high of 20.3079 and a low of 20.1972 pesos per dollar.
Concurrently, the US dollar’s movement against other major currencies, measured by the Intercontinental Exchange’s Dollar Index (DXY), climbed 0.34% to 103.75.
Softer Inflation in the US
Data from the US Labor Department showed that consumer prices rose by 0.2% in February, undershooting market expectations of a 0.3% increase. On an annual basis, headline inflation came in at 2.8%, below the consensus forecast of 2.9%. The core consumer price index, which excludes volatile food and energy costs, also rose by 0.2% monthly to register an annual inflation rate of 3.1%, compared with analysts’ estimates of 0.3% and 3.2% respectively.
“We anticipate that the lower-than-expected inflation figures in the United States will reinforce expectations that the Federal Reserve will have room to resume adjusting its monetary stance mid-year,” noted brokerage firm Vector Casa de Bolsa in a written statement.
The Peso’s Second Day of Gains
The implementation of 25% tariffs on US steel and aluminum imports, alongside an extension on other announced tariffs until April 2, has created uncertainty in global markets. Nonetheless, the peso has managed to advance for a second consecutive day.
“From Mexico, President Claudia Sheinbaum is optimistic that the United States will not impose tariffs in April… With so many volatile decisions and last-minute adjustments, uncertainty remains,” said Felipe Mendoza, market analyst at ATFX.
Analysts at Banorte pointed out that while the peso continues to firm against the dollar, a technical rebound could reverse some of its recent gains, identifying key resistance at 20.40 pesos per dollar, followed by 20.50 pesos per dollar.
As investors monitor the evolving trade measures and closely watch upcoming monetary policy announcements, the peso’s near-term trajectory will likely hinge on how quickly the Fed moves to adjust rates and on any new developments in US–Mexico trade relations.
