Mexican Peso declines despite higher inflation and GDP growth, as US sanctions on Iran weigh on market sentiment.
The Mexican Peso weakened against the US Dollar, with USD/MXN trading up over 0.25% at 16.96. The move came despite Mexico’s inflation rising to 3.26% in the first half of August, up from 3.1% previously, according to official data.
Mexico’s GDP expanded by 1.4% in Q2 2026, recovering from a 0.3% contraction in the prior quarter but missing estimates of 1.5%. Core inflation eased slightly to 3.94% from 3.95%. The data failed to support the Peso as broader risk aversion took hold.
US sanctions on Iran, targeting sectors including technology, gold, and shipping, dampened market sentiment. The Treasury Department’s measures, described as “unprecedented,” sanctioned nearly 60 entities linked to Iran, further pressuring emerging market currencies.