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Mexican Peso Hits 18-Month High as U.S. Inflation Eases

Cooler U.S. inflation weakened the dollar enough to sustain carry demand for the peso.

Overview

  • The peso strengthened to about 17.84 per dollar, its best level since July 2024, with a 0.42% gain on the day, according to Banxico.
  • December U.S. CPI and core readings reinforced expectations the Fed will hold rates this month, with futures pricing rising odds of a June quarter-point cut.
  • Analysts pointed to Mexico’s stable yield advantage over the U.S. as a key draw for carry trades and a driver of resilient peso demand.
  • Mexico’s equity benchmark, the S&P/BMV IPC, fell roughly 0.68% on profit-taking despite currency strength.
  • In Argentina, official and parallel dollar quotes eased, Banco Nación’s retail dollar closed at ARS 1,485, the blue hovered near ARS 1,505, and the BCRA reported net purchases of about US$55 million.