After a negative start to the day, the local currency reduces its losses supported by local inflation data showing an acceleration above expectations in April.

The Mexican peso is trading steadily against the dollar on Thursday morning. After a negative start to the day, the local currency is trimming its losses, supported by local inflation data showing an acceleration above expectations in April.

The spot exchange rate is at the level of 16.9017 units per dollar. Compared to yesterday’s 16.8963 units, with the official closing of the Banco de México (Banxico), this represents a marginal loss of 0.03 percent for the peso.

The dollar price is trading in a narrow range with a high of 16.9720 pesos and a low of 16.8935 pesos. The Dollar Index (DXY), from the Intercontinental Exchange, which measures the dollar against six currencies, is down 0.15% at 105.38 points.

Mexico’s general inflation accelerated in April to 4.65% annually, more than what was expected by the consensus of economists, while core inflation decreased for the fifteenth consecutive month to 4.37 percent.

The increase in general inflation supports expectations that the central bank will keep the reference interest rate unchanged at the current 11% later today, as well as the attractive carry with United States rates.

On the other hand, the market is also digesting a larger-than-expected increase in weekly unemployment benefit claims in the United States, which last week reached 231,000, the highest level since August 2023.

The peso found support in two economic data points: a rise in local inflation which suggests a longer period of unchanged interest rates and a weaker labor market in the United States. It is expected that at 1:00 p.m., Banxico will announce its third decision of the year and, according to a Reuters poll, the market widely expects it to maintain its rate, after lowering it in March for the first time since 2021.