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Mexican Peso rallies to five-month highs vs the US dollar

USD/MXN was around 17.18 after hitting five-month lows near 17.09, as weaker US nonfarm payrolls and expectations of fewer Fed hikes boosted risk appetite.

Reported · Written up by our desk · Major Pairs

FXStreet reports the Mexican peso (MXN) strengthened to a five-month high versus the US dollar (USD) after a weaker US jobs report helped dent the greenback and lifted risk appetite. In the latest move, USD/MXN traded around 17.18 after refreshing five-month lows near 17.09.

The pricing reaction also drew support from Mexico’s inflation data, with INEGI showing headline inflation eased to 3.12% year over year in July from 3.37%, its lowest level in six years. Core inflation was 3.95% YoY, slightly above the 3.94% forecast.

FXStreet said US Nonfarm Payrolls for July showed a 23K job loss, missing expectations for an 80K gain, and revisions reduced May and June jobs by 103,000. While the US unemployment rate fell to 4.1% from 4.2%, the labor-market weakness added to speculation the Federal Reserve may pause on rate hikes.

With the US Dollar Index (DXY) down 0.42% to 99.54, the article also notes Mexico’s Banxico kept its policy rate unchanged at 6.50% and signaled the main reference rate would remain steady for the foreseeable future. It also points to the next steps in Mexico’s calendar, including June industrial output and upcoming inflation, jobless claims, and University of Michigan consumer sentiment data.

Latest closeDollar index 99.98 ▲0.3%

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