USD/MXN drops to 17.05 after softer US CPI reduces expectations for a Federal Reserve rate hike this cycle.
The Mexican Peso climbed to its strongest level since 2022, trading at 17.05 against the USD, as weaker-than-expected US inflation data diminished bets on a Federal Reserve rate increase. The move follows a softer CPI print that eased pressure on the Fed to tighten further.
Prior to the release, the USD/MXN pair hovered near 17.20, with investors pricing in a higher likelihood of a Fed hike. The last time the peso traded at these levels was in early 2022, before the Fed began its aggressive tightening cycle.
Markets reacted swiftly, with the peso extending gains as traders reassessed the outlook for US monetary policy.