USD/MXN falls to 16.97 before rebounding to 17.02 as weak US retail sales and sentiment data reduce Fed hike bets.
The Mexican peso strengthened to a 24-month high against the US dollar, with USD/MXN dipping to 16.97 before recovering to 17.02. Weak US economic data, including a 0.6% month-over-month contraction in retail sales and a drop in consumer sentiment, weighed on the dollar.
US inflation data showed easing price pressures, while July’s Nonfarm Payrolls and jobless claims suggested labor market softening. Markets now price a 32% chance of a Fed rate hike in September, down from earlier expectations. June’s retail sales had grown 0.2%.
Traders are also eyeing upcoming Banxico minutes for clues on Mexico’s monetary policy. Meanwhile, Mexico’s economy secretary urged the US to reduce auto industry tariffs, highlighting competitive disadvantages.