The Mexican peso trades with gains following local inflation figures

The spot exchange rate is at the level of 16.7122 units per dollar. Compared to yesterday's official closing of 16.7373 units.

Ignacio Teson•Friday, March 22, 2024•1 min read

An uptick in inflation in the first half of March reinforces bets that yesterday’s interest rate cut announced by Banxico will not mark the beginning of a rate-cutting cycle.

The Mexican peso is trading with gains on Friday morning. The local currency is advancing following local inflation figures, which supported the belief that the recent interest rate cut in Mexico will not mark the beginning of a cycle of decreases.

The spot exchange rate is at the level of 16.7122 units per dollar. Compared to yesterday’s official closing of 16.7373 units, according to data from the Bank of Mexico (Banxico), this represents an improvement of 2.51 cents for the currency, equivalent to 0.15 percent.

USD/MXN

The price of the dollar is fluctuating within an open range, reaching a maximum of 16.8335 pesos and a minimum of 16.6945 pesos. The Dollar Index (DXY) from the Intercontinental Exchange, which measures the greenback against a basket of six major currencies, rose by 0.88% to 104.32 points.

The exchange rate remains relatively stable against the US dollar, amid expectations that the Bank of Mexico will continue with its restrictive monetary policy in the coming months.

This morning, the National Institute of Statistics and Geography (INEGI) announced that the general consumer price index rose to 4.48% annually in the first half of March, exceeding expectations. Core inflation was at 4.69 percent.

This week has been dominated, in terms of economic information, by announcements of monetary policy. Following a rate cut by Banxico yesterday, the first since mid-2021, traders are analyzing the outlook for interest rate differentials.

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ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.