Overview
- The peso closed at 17.8438 per dollar, its strongest since July 2024, with support from Mexico’s higher yield differential and reduced geopolitical worries.
- U.S. December CPI rose 0.3% month on month and core inflation came in at 0.2% versus 0.3% expected, reinforcing a January hold and tilting expectations toward easing later this year.
- CME Fed‑funds futures implied roughly a 47% chance of a 25 bp cut by June, helping restrain the dollar and favoring carry flows into the peso.
- Policy uncertainty increased as outlets reported a DOJ criminal probe into Fed Chair Jerome Powell, while stocks fell with the Dow down 0.80%, the S&P 500 off 0.19%, the Nasdaq down 0.10% and Mexico’s S&P/BMV IPC lower by 0.61%.
- In Argentina, official and parallel dollar quotes eased as country risk climbed to 581 basis points after INDEC reported 2.8% inflation for December and a 31.5% annual rate for 2025.