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The Mexican peso advances nearly 1% following the inflation data from the United States.

The local currency gained ground driven by economic figures from the United States that support expectations of interest rate cuts by the Federal Reserve.

The Mexican peso surged during the midweek session. The local currency gained ground propelled by economic figures from the United States that support expectations of interest rate cuts by the Federal Reserve (Fed).

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The exchange rate closed the session at the level of 16.6864 units per dollar. With a record of 16.8436 units yesterday, at the official close of the Bank of Mexico (Banxico), it represented a gain of 15.72 cents or a variation of 0.93 percent.

USD/MXN

The dollar price operated in an open range with a maximum of 16.9080 pesos and a minimum of 16.6504 pesos. The Dollar Index (DXY), from the Intercontinental Exchange, which compares the greenback with six currencies, retreated 0.67% to 104.31 points.

Consumer prices in the United States increased less than expected in April, retail sales remained steady, and manufacturing activity in New York declined. The data supported rate cut bets.
These signs of weakness in the economy, coupled with inflation below estimates, lead us to believe that the Federal Reserve should be cutting the reference rate in the second half of the year.

The peso gained ground following the release of April’s CPI in the United States; the market expected a high correlation with yesterday’s PPI. The data generated a small rally in the local currency.

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ABOUT THE AUTHOR See More
Ignacio Teson
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.
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