09.09.202514:12:24UTC+00Mexican Peso Holds Strong After Inflation

The Mexican peso showed strength, nearing 18.6 per USD, as the US dollar weakened amid softer US labor statistics and a drop in Treasury yields, reducing foreign pressure on the peso. Simultaneously, Mexico is benefitting from a stable inflation landscape. In August, headline inflation modestly declined to approximately 3.57%, while core inflation remained stable at 4.23%. These figures have bolstered expectations that Banxico, Mexico's central bank, will persist with its cautious strategy of easing monetary policy at a gradual pace. Reinforcing this outlook, the minutes from Banxico’s August meeting revealed a 25 basis point rate cut to 7.75%, with most members in favor of continuing slow reductions, potentially including another 25 basis point cut later in the year. Moreover, Banxico’s recent upward revisions to economic growth projections, with a 2025 GDP forecast increased to 0.6% and 2026 to 1.1%, suggest a resilient economic outlook, further underpinning the peso.