USD/MXN drops to 17.18 after US payrolls miss forecasts, fueling Fed rate cut bets and boosting risk assets.
The Mexican Peso surged to a five-month high against the US Dollar, trading at 17.18 after US Nonfarm Payrolls reported a 23K job loss in July, well below the expected 80K gain. Revisions to May and June data cut 103K jobs, further weakening the Greenback and stoking speculation the Federal Reserve may pause rate hikes in 2026.
Mexico’s inflation eased to a six-year low of 3.12% YoY in July, nearing Banxico’s 3% target, while core inflation slightly exceeded forecasts at 3.95%. The central bank held rates at 6.50% and signaled stability, projecting inflation to converge to its goal by late 2027. The US Dollar Index fell 0.42% to 99.54 amid the soft jobs data.
The shift in Fed expectations and Mexico’s disinflation progress drove the Peso’s rally, with USD/MXN hitting a low of 17.09 earlier in the session.