Mexican Peso Rides Interest Rate Differential Amid Fed Stability

The Mexican peso remained stable at 17.44 per USD in late July after the Federal Reserve kept interest rates unchanged.

This decision weakened the US dollar, as one-third of investors had expected a rate hike.

Despite this, Mexico continued to benefit from its wide interest rate differential, with Banxico's policy rate at 6.50% versus the Fed's 3.50%-3.75% range.

The country also saw its trade position improve after the US announced new tariffs on imports from about 60 economies, although goods that comply with USMCA rules of origin will remain exempt.