Mexican peso falls for the third consecutive session, reacting to local inflation and Fed minutes
The peso weakened against the U.S. dollar, closing the day at 19.4902 units per dollar, down from yesterday’s close of 19.3435 units.
The Mexican peso depreciated for the third consecutive session this Wednesday, impacted by local inflation data that bolstered bets on continued interest rate cuts in the country.
The peso weakened against the U.S. dollar, closing the day at 19.4902 units per dollar, down from yesterday’s close of 19.3435 units, according to official data from the Bank of Mexico (Banxico). This represented a loss of 14.67 cents or 0.76% for the peso.
The exchange rate fluctuated between a high of 19.4910 and a low of 19.3186 pesos per dollar. The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.37% to 102.93 points.
According to the National Institute of Statistics and Geography (INEGI), Mexico’s consumer price index (CPI) increased by 0.05% in September, bringing the annual rate to 4.58%. The core inflation rate, which excludes volatile food and energy prices, climbed 0.28% for the month.
S
. Core inflation also surprised to the downside, reflecting a slower pace compared to the previous year.
These inflation figures reinforced the belief that the Bank of Mexico will continue cutting interest rates, which dampens demand for local debt, especially given expectations of stable U.S. interest rates.
In the minutes from its most recent policy meeting, the Federal Reserve (Fed) expressed increased confidence that inflation will drop to its 2% target, noting that the recent 50 basis point rate cut does not necessarily indicate that future cuts will follow the same pattern.
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