Quick overview

Live USD/MXN Chart

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The Mexican peso advanced slightly against the U.S. dollar on Tuesday, supported by local inflation figures that reinforced market expectations for further monetary easing.

The currency closed at 18.6297 per dollar, up 2.90 centavos—or 0.16%—from Monday’s 18.6587, according to official data from Banco de México (Banxico). The dollar traded within a range of 18.6220 to 18.7386 pesos during the session. Meanwhile, the ICE Dollar Index (DXY), which tracks the U.S. dollar against six major currencies, rose 0.34% to 97.78.

Inflation Data Highlights

Mexico’s Consumer Price Index (CPI) rose 0.06% in August, in line with market expectations. On an annual basis, headline inflation increased to 3.57%, slightly above June’s figure, yet still within Banxico’s target range of 3% ±1 percentage point.

Core inflation, which excludes volatile items, increased 0.22% month-on-month—above expectations—and remained at 4.23% year-on-year. The persistence of core inflation highlights the challenges Banxico faces in containing underlying price pressures.

Policy Implications

The sustained strength in core prices presents a dilemma for the central bank. While headline inflation shows moderation, rigidity in goods and services suggests that risks remain. Last month, Banxico moderated the pace of policy easing with a quarter-point rate cut. Minutes from the meeting indicate that the board may consider additional reductions in the future, depending on how inflation dynamics evolve.