Mexican Peso Falls Against the Dollar After Banxico Rate Cut
Earlier in the day, INEGI reported that Mexico’s headline inflation slowed to 3.51% in July, its lowest reading since December 2020.
Quick overview
- The Mexican peso weakened slightly against the U.S. dollar, closing at 18.6368 pesos per dollar after a modest interest rate cut by Banxico.
- Banxico reduced its benchmark rate by 25 basis points to 7.75%, the lowest in three years, amid lower-than-expected inflation data.
- Mexico's headline inflation slowed to 3.51% in July, while core inflation remained above Banxico's target at 4.23%.
- América Móvil shares surged 5.1% on reports of a potential sale of AT&T Mexico, with the stock reaching its highest close since August 2023.
The Mexican peso weakened slightly against the U.S. dollar on Thursday, as markets digested lower-than-expected local inflation data and a modest interest rate cut by the Bank of Mexico (Banxico).
The exchange rate closed the session at 18.6368 pesos per dollar, compared to 18.6142 yesterday, according to official Banxico data. This represented a depreciation of 2.26 centavos, or 0.12%.
During the session, the dollar traded between a high of 18.7357 and a low of 18.5904 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, dropped 0.13% to 98.10 points.
Banxico announced a 25 basis point cut to its benchmark rate, bringing it to 7.75%—its lowest level in three years. The decision was split among board members, and the central bank said it will consider further adjustments depending on upcoming data.
Earlier in the day, INEGI reported that Mexico’s headline inflation slowed to 3.51% in July, its lowest reading since December 2020. Core inflation remained above Banxico’s target, at 4.23%.
“We expect a technical rebound after the resistance at 18.58 held. The next key support level is seen near 18.74. We recommend maintaining current positions,” said analysts.
América Móvil Shares Jump on Reports of Potential AT&T Mexico Sale
América Móvil, Mexico’s largest telecom operator, surged 5.1% on the Mexican Stock Exchange following media reports suggesting that rival AT&T Mexico may be up for sale.
According to reports, AT&T Inc. is working on selling its Mexican unit in a deal that could exceed $2 billion.
América Móvil shares rose to 17.7 pesos, putting them on track for their highest close since August 2023. The company operates across Latin America and Europe.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save