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Mexican Peso Hits 18-Month High as Softer U.S. Core CPI Tempers Dollar

A softer U.S. core CPI reading reinforced bets the Federal Reserve will hold rates this month.

Overview

  • The peso closed at 17.8438 per dollar, its strongest level since July, improving 0.42% from the prior Banxico close of 17.9188.
  • U.S. December CPI rose 0.3% month over month while core inflation registered 0.2% versus 0.3% expected, underpinning a Fed-on-hold outlook for January.
  • Janus Henderson said Treasury yields initially rose on the data before retreating, and it now sees a January rate cut as effectively off the table.
  • The U.S. Dollar Index hovered near 99 with limited movement, reflecting a lack of clear direction for the greenback during the session.
  • Analysts cited improved risk sentiment and technical levels near 17.80–17.96, with intraday trading spanning 17.8130 to 17.9325 per dollar.