Geopolitical risks in the Middle East lift the US Dollar, offsetting weaker US inflation and retail sales data for July.
The Mexican Peso retreated against the US Dollar on Monday, with USD/MXN rising to 17.03 after briefly dipping to a weekly low of 16.99. The move came despite softer-than-expected US inflation and retail sales figures, which had initially weighed on the Greenback.
July’s US Consumer Price Index (CPI) grew 3.4% year-over-year, down from 3.5% in June, while the Producer Price Index (PPI) slowed to 4.7% from 5.5%. Retail sales also contracted by 0.6%, signaling cooling consumer demand. The data had pushed the US Dollar Index (DXY) near two-month lows before paring losses.
Uncertainty over Middle East conflicts, including US-Iran tensions, appears to have supported the Dollar. Traders are also awaiting the Bank of Mexico’s minutes on August 20 for further policy cues.