The Mexican peso strengthened against the dollar on Tuesday. The market reacted to remarks from Federal Reserve Chairman Jerome Powell, who stated at a European Central Bank monetary policy event that more inflation data is needed before considering rate cuts.
The exchange rate closed the session at 18.2697 units per dollar, compared to yesterday’s 18.3640, according to official data from the Bank of Mexico (Banxico). This movement marked a gain of 9.43 cents for the currency, equivalent to 0.51 percent.
Throughout the day, the dollar traded in a range between a high of 18.4965 units and a low of 18.2140 units. The Intercontinental Exchange’s Dollar Index (DXY), which measures the greenback against a basket of six currencies, was down 0.20% at 105.69 units.
USD/MXN
“We just want to see that those levels we’re seeing are a real reading of what’s really happening with underlying inflation,” Powell explained at a monetary policy conference in Portugal hosted by the European Central Bank.
The Fed has maintained its benchmark rate steady in the range of 5.25% to 5.50% since July, but policymakers are now discussing when to begin easing rates as inflation data approaches the 2 percent target.
May’s data showed that the Fed’s preferred inflation gauge did not rise during the fifth month of the year, while the 12-month rate fell to 2.6%, above the central bank’s target but with a decline that has brought it closer.