Mexican Peso Reverses Losses and Gains Ground Against the Dollar
Meanwhile, the Dollar Index (DXY) from the Intercontinental Exchange, which measures the dollar against six major currencies, rose 0.13%.
Quick overview
- The Mexican peso strengthened against the dollar after early losses, closing at 17.1753 pesos per dollar.
- Traders assessed economic data from both Mexico and the U.S., including inflation figures that exceeded expectations.
- The peso's initial decline was influenced by a stronger dollar and concerns over domestic security following violent incidents in Mexico.
- Moderate volatility is anticipated in the near term, with potential consolidation below the 17.25 level depending on political developments.
The Mexican peso strengthened after early losses, as traders assessed economic data from Mexico and the United States.
The peso appreciated against the dollar in the second session of the week, recovering ground after an early decline, as market participants digested economic figures from both countries and monitored Mexico’s domestic security situation.
The exchange rate closed at 17.1753 pesos per dollar. Compared with Monday’s close of 17.2659, according to official data from Banco de México (Banxico), the peso posted a gain of 9.06 centavos, or 0.53%.
The dollar traded within a range of 17.3023 at the high and 17.1606 at the low. Meanwhile, the Dollar Index (DXY) from the Intercontinental Exchange, which measures the dollar against six major currencies, rose 0.13% to 97.87 points.
Earlier in the session, traders absorbed Mexican inflation data that came in above market expectations. Headline inflation rose 3.92% year-on-year in the first half of February, while core inflation unexpectedly eased to 4.52%.
The peso’s initial weakness also reflected a stronger dollar, as investors analyzed better-than-expected U.S. consumer confidence data. Markets are also awaiting the State of the Union address by President Donald Trump.
Mexican Peso Projections and Context
In addition, the peso recovered after Monday’s decline, which had been driven by market caution following violent incidents reported on Sunday across several Mexican states. The unrest was linked to the killing of the leader of the Cártel Jalisco Nueva Generación (CJNG), known as El Mencho.
Looking ahead, moderate volatility is expected in the near term. The peso could attempt to consolidate below the 17.25 level if Trump adopts a conciliatory tone following the crackdown on drug trafficking in Mexico.
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