Mexican Peso Surges on Weak US Jobs Data

The Mexican Peso (MXN) has reached a five-month high against the US Dollar (USD), driven by weak US jobs data and improved risk appetite. The USD/MXN pair trades at 17.18, with the Greenback getting battered on speculation that the Federal Reserve may not raise rates in 2026.

Mexico's inflation rate has eased to a six-year low of 3.12% YoY in July, according to INEGI, the National Statistics Agency. Core inflation was slightly higher than forecast at 3.95% YoY.

The Bank of Mexico left interest rates unchanged at 6.50%, hinting that they will remain steady for the foreseeable future. If inflation continues its downward trajectory, it could end 2026 below Banxico's 3.5% forecast for headline and underlying inflation in 2027.