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2w ago

Soft U.S. CPI Fuels Peso Gains on Heightened Fed Cut Odds

Traders have priced in a near-certain September Fed rate cut, with U.S. PPI, labor figures and Jackson Hole speeches set to test whether the momentum holds

Dólar vs Peso mexicano: ¿En cuánto se cotiza el tipo de cambio hoy? | Crédito: REUTERS/Canva
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Overview

  • U.S. consumer prices rose 0.2% in July from June and 2.7% year-on-year, falling short of forecasts and bolstering expectations for earlier Federal Reserve easing.
  • The U.S. Dollar Index slid about 0.4%–0.5% after the CPI release, driving the peso to trade between 18.50 and 18.64 per dollar in spot and Banxico reference rates.
  • CME FedWatch futures showed probabilities for a September rate cut jumping into the high-90s percent range following the softer inflation figures.
  • Retail bank and exchange-house buy/sell quotes in Mexico continued to exhibit wide spreads despite tighter interbank spot rates.
  • Mexico’s S&P/BMV IPC equities index edged lower as investors weighed stronger peso levels against upcoming U.S. PPI, labor data and central bank speeches.