Particle.news
Download on the App Store

Mexican Peso Hits 18-Month High Near 17.80 as Dollar Softens

Softer U.S. inflation lowered near-term Fed tightening odds, bolstering peso carry trades.

Overview

  • The peso closed Tuesday at 17.8438 per dollar, its strongest finish since July 2024, and traded around 17.81 on Wednesday after touching 17.80 intraday.
  • December U.S. CPI rose 0.3% month over month with core at 0.2%, reinforcing expectations the Fed keeps rates unchanged in the near term.
  • On Wednesday, U.S. PPI increased 0.2% as forecast and retail sales beat expectations at 0.6%, while the DXY eased around the 99 level.
  • Analysts highlight a stable MexicoU.S. rate gap near 3.25–3.50 percentage points that continues to attract carry flows into peso assets.
  • Mexico’s S&P/BMV IPC slipped about 0.68% on profit-taking in consumer and airport shares, as markets monitored upcoming Fed remarks and the Beige Book, with some commentary also citing political uncertainty around the Fed as a drag on the dollar.