Mexican Peso Dips Slightly Against Dollar After Four-Day Winning Streak
The National Consumer Price Index (INPC) slowed for the third consecutive half-month period, coming in at 3.55% year-over-year.
Quick overview
- The Mexican peso weakened slightly against the U.S. dollar, ending a four-session winning streak.
- The exchange rate closed at 18.5548 pesos per dollar, marking a 0.12% depreciation from the previous day.
- Mixed economic signals from the U.S. and softer inflation in Mexico influenced market reactions.
- Despite the pullback, the peso remains strong, having gained 1.19% during its recent rally.
The Mexican peso weakened slightly against the U.S. dollar on Thursday, snapping a four-session winning streak that had pushed the currency to its strongest level in nearly a year.
The retreat came after renewed optimism surrounding a U.S.-Japan trade deal lifted the peso in recent days.
The exchange rate closed at 18.5548 pesos per dollar, according to official data from Banco de México (Banxico), marking a depreciation of 2.19 centavos, or 0.12%, compared to Wednesday’s close of 18.5329.
During the session, the dollar traded between a high of 18.5915 and a low of 18.5297 pesos. Meanwhile, the U.S. Dollar Index (DXY)—which measures the greenback against a basket of six major currencies—rose 0.22% to 97.43 points.
Mixed U.S. Data and Softer Inflation in Mexico
Markets absorbed mixed economic signals from the U.S. The preliminary July PMI composite fell to a seven-month low, although the services subindex exceeded expectations. Weekly jobless claims edged down slightly, suggesting labor market resilience.
In Mexico, investors responded to new inflation figures. The National Consumer Price Index (INPC) slowed for the third consecutive half-month period, coming in at 3.55% year-over-year in early July—comfortably within Banxico’s target range of 3% ± 1 point.
This lower-than-expected reading increased speculation that Banxico could cut interest rates again at its upcoming August 7 monetary policy meeting.
A Pause After Strong Gains
Despite Thursday’s modest pullback, the peso remains strong. On Wednesday, it hit its best level since August 1, 2024, touching a session low of 18.41. During its four-day rally, the currency gained 22.40 centavos, or 1.19%, reflecting optimism around international trade talks and improved local data.
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