"During the session, the exchange rate briefly touched levels near 17.16 pesos per dollar. However, it was not immune to intraday volatility and mixed movements, reflecting an environment that remains sensitive to external factors. This positive performance occurred amid increased risk appetite for emerging-market currencies, driven mainly by the dollar's downward correction. Throughout the session, investors adjusted positions in response to signs of reduced structural strength in the U.S. currency, allowing the peso to consolidate as one of the best-performing currencies in the emerging-market segment."
"On the domestic front, markets reacted to the release of Mexico's January inflation data published by the National Institute of Statistics and Geography. Headline inflation stood at 3.79% year over year, up slightly from the previous month but marginally below market expectations. However, attention focused on core inflation, which surprised to the upside and reinforced the perception that more persistent inflationary pressures have not yet fully dissipated."
"Under this scenario, analysts believe the Bank of Mexico's cautious stance, recently adopted, is justified after pausing its interest rate-cut cycle. The prevailing expectation is that this pause could extend into the coming months until a clearer, more sustained slowdown in core inflation is observed. Meanwhile, the U.S. dollar recorded a significant decline globally, with the dollar index falling more than 0.6% during the session."
The Mexican peso appreciated against the U.S. dollar, briefly nearing 17.16 pesos per dollar, while showing intraday volatility amid sensitivity to external factors. Emerging-market currencies benefited from a weaker dollar and increased risk appetite as investors adjusted positions on signs of reduced U.S. currency strength. Mexico's January headline inflation was 3.79% year over year, slightly higher month-to-month but a touch below expectations, while core inflation surprised to the upside, indicating persistent underlying pressures. Analysts view the Bank of Mexico's decision to pause interest rate cuts as justified, with the pause likely to extend until core inflation slows more sustainably. The dollar index fell more than 0.6% during the session.
Read at London Business News | Londonlovesbusiness.com
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