Mexican Peso Slides as US Inflation Expectations Soar

The Mexican Peso has declined against its North American counterpart, the US Dollar, as the USD/MXN rose over 0.25% to 16.93.

This modest rebound occurred despite softer dollar conditions, which might have been expected to boost the peso.

However, inflation expectations in the US continued to rise, forcing investors to price in a nearly 61% chance of a 25-basis-point rate hike by the Federal Reserve at its September 15-16 meeting.

The Mexican economy is expected to face challenges, with private economists predicting that interest rates will remain unchanged for the foreseeable future, keeping Mexico's main reference rate at 6.50% for the rest of 2026 and throughout 2027.