Mexican Peso Inches Up Against the Dollar Following Bank of Mexico Minutes
During the day, the dollar traded in a range between a high of 18.7062 pesos and a low of 18.5950.
Quick overview
- The Mexican peso appreciated slightly against the U.S. dollar, closing at 18.6169 pesos per dollar after Banxico's minutes indicated a potential slowdown in interest rate cuts.
- The exchange rate fluctuated between 18.7062 and 18.5950 pesos during the day, with the peso gaining 0.06%.
- Banxico's recent meeting minutes suggest future interest rate adjustments may be smaller due to rising consumer inflation concerns.
- U.S. President Trump's announcement of a 50% tariff on copper imports adds uncertainty for Mexican manufacturers, particularly in the auto and home appliance sectors.
The Mexican peso appreciated slightly against the U.S. dollar on Thursday, reversing earlier losses after the Bank of Mexico (Banxico) released minutes from its latest policy meeting, which signaled a potential slowdown in the pace of interest rate cuts.
The exchange rate closed the session at 18.6169 pesos per dollar, compared to 18.6284 the previous day, according to official data from Banxico. This represented a gain of 1.15 centavos or 0.06% for the peso.
During the day, the dollar traded in a range between a high of 18.7062 pesos and a low of 18.5950. Meanwhile, the U.S. Dollar Index (DXY) from the Intercontinental Exchange—which measures the dollar against a basket of six major currencies—edged up 0.01% to 97.60.
Banxico Minutes Hint at Gradual Approach
According to the minutes from Banxico’s June meeting, future adjustments to the key interest rate will likely be smaller than the recent 50-basis-point cuts. Board members agreed that a more gradual approach could be warranted in upcoming decisions.
Banxico has lowered the benchmark rate by 50 basis points in each of its last four meetings, bringing it to 8%. However, a recent uptick in consumer inflation has reintroduced concerns over persistent price pressures, prompting a more cautious stance.
Tariff Tensions Add to Uncertainty
Adding to market concerns, U.S. President Donald Trump announced a 50% tariff on copper imports starting August 1. The measure is expected to impact Mexican manufacturers, particularly those in the auto and home appliance sectors.
The exchange rate also remains influenced by broader U.S. dollar weakness, driven by shifting macroeconomic expectations and growing uncertainty surrounding American trade policy.
Labor Market Data in the U.S.
Elsewhere, U.S. jobless claims data showed some strength in the labor market. Initial unemployment claims for the week ending July 4 fell by 5,000 to 227,000, beating the consensus forecast of 235,000.
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