16.12.202518:58:14UTC+00Mexican Peso Appreciates Further

In recent developments, the Mexican peso has appreciated to levels surpassing 18 per US dollar, a peak not seen since July 2024. This trend is occurring against a backdrop of a broad weakening of the US dollar, paired with Mexico maintaining a relatively tight monetary policy stance. In the United States, signs of a softening labor market—with indications such as reduced job creation and an increasing unemployment rate—alongside diminishing consumption indicators, have led markets to anticipate a greater likelihood of further easing by the Federal Reserve by 2026. This anticipation consequently undermines support for the dollar.

Meanwhile, in Mexico, inflation figures for November were unexpectedly high, with the headline inflation rate nearing 3.8% and core inflation accelerating into the mid-4% range. These figures have reaffirmed the Bank of Mexico's prudent, meeting-to-meeting policy strategy following earlier rate cuts. This policy divergence between the two nations renders Mexico's real interest rates appealing when compared to projected US levels, thereby attracting carry-trade inflows and facilitating the peso's recovery.