Mexican Peso Strengthens Following U.S. Inflation Data in Line with Expectations
The Mexican peso appreciated against the U.S. dollar on Wednesday after U.S. consumer inflation data reinforced expectations that the Federal Reserve (Fed) will cut interest rates in its meeting next week.
The exchange rate closed the day at 20.1108 pesos per dollar, improving from the previous official closing rate of 20.1710, according to data from Banco de México (Banxico). This represents a gain of 6.02 cents, or 0.30%, for the peso.
During the session, the dollar traded within a range of 20.2600 pesos at its highest and 20.1016 USD/MXN at its lowest. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, rose 0.28% to 106.70 points.
Macroeconomic Data
The U.S. Labor Department reported that the Consumer Price Index (CPI) increased by 0.3% in November, matching economists’ expectations. On an annual basis, inflation stood at 2.7%, also aligning with forecasts.
The Fed is scheduled to meet next week on December 17–18 to decide its next steps in addressing inflation. Current data, including a rise in unemployment, suggest the central bank will lower its benchmark interest rate.
According to the CME’s FedWatch Tool, which tracks federal funds futures, there is a 94.9% probability that the Fed will cut rates by 25 basis points to a range of 4.25%–4.50% during its upcoming meeting. However, rates are expected to hold steady in January.
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