Background on the Mexican Peso and its Recent Fluctuations
The Mexican peso has experienced a slight appreciation against the US dollar on this Tuesday morning. After two consecutive days of losses, the local currency has regained ground following the release of new US inflation figures that met market expectations.
Current Exchange Rate and Recent Movements
The spot exchange rate now stands at 18.7093 pesos per dollar, compared to yesterday’s closing rate of 18.7293 pesos according to data from Mexico’s central bank, Banxico. This translates to a 2-cent gain or a 0.11% increase for the peso.
- The dollar’s movement ranged from a high of 18.7513 pesos to a low of 18.6503 pesos.
- The DXY index, which compares the US dollar to six other currencies, rose by 0.41% to 98.52 units.
US Inflation Data and its Impact on the Peso
The US Consumer Price Index (CPI) reported a 0.3% monthly increase in June, following a 0.1% rise in May. This marked the highest monthly growth since January, with annual inflation reaching 2.7% compared to 2.4% in May.
Monetary Policy and Future Outlook
The Federal Reserve has maintained a cautious stance on interest rates, keeping them stable as they gather more information about the impact of tariffs on prices. Their recent minutes indicated a likelihood of rate cuts this year.
“The peso remains slightly affected by the announcement of US tariffs on Mexico, though it has reversed part of its decline after assessing the implications of US inflation for Fed policy,” stated Monex.
Key Questions and Answers
- What caused the recent appreciation of the Mexican peso? The peso gained ground following the release of US inflation data that met market expectations, despite ongoing concerns about US tariffs on Mexico.
- How has the Federal Reserve responded to recent inflation data? The Fed has maintained a cautious stance on interest rates, keeping them stable as they gather more information about the impact of tariffs on prices. Their recent minutes suggested a possibility of rate cuts this year.
- What are the recent trends in US inflation? The US Consumer Price Index reported a 0.3% monthly increase in June, following a 0.1% rise in May. Annual inflation reached 2.7%, up from 2.4% in May.
