Mexican Peso Strengthens Following U.S. Inflation Data

The Mexican peso appreciated against the U.S. dollar on Tuesday, reaching levels not seen since October. The rally was driven by a weakening dollar following softer-than-expected inflation data from the United States. The exchange rate closed the session at 19.3926 pesos per dollar, according to data from Mexico’s central bank (Banxico). This marks a gain of 21.13 centavos (1.08%) compared to Monday’s official close of 19.6039. Throughout the day, the dollar traded between a high of 19.6405 and a low of 19.3757 pesos. Meanwhile, the U.S. Dollar Index (DXY)—which measures the greenback against a basket of six major currencies—fell 0.83% to 100.97 points. U.S. consumer prices rose 2.3% year-over-year in April, coming in below the consensus forecast of 2.4%. Core inflation remained steady at 2.8%, in line with analyst expectations. While the data suggests the Federal Reserve is likely to hold off on rate cuts for now, it also reflects some, albeit limited, impact from President Donald Trump’s recent tariff policies. Locally, traders are eyeing Banxico’s upcoming monetary policy decision on Thursday. Markets widely expect another 50-basis-point interest rate cut—the third consecutive reduction of that magnitude. The peso’s recent gains have been accompanied by a consistent pattern of lower daily lows in the USD/MXN pair, suggesting that the exchange rate could continue to trend downward.