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Mexican peso jumps as softer US inflation trims Fed hike odds

USD/MXN fell to about 17.05 after July CPI came in at 3.4% year over year and core eased to 2.5%.

Reported · Written up by our desk · Major Pairs

The Mexican peso strengthened against the US dollar on Wednesday, with USD/MXN trading near 17.05, after US inflation data pointed to ongoing disinflation and reduced market expectations for a Federal Reserve rate hike at its next meeting, according to FXStreet.

US July CPI matched estimates, the report said, with headline inflation declining from 3.5% to 3.4% year over year and core CPI easing from 2.6% to 2.5% over the twelve months to July.

FXStreet also noted the data arrived after a 23% jump in oil in July, and it said the US dollar index was up modestly, at 99.98.

FXStreet cited a Citi Mexico expectations survey showing analysts expect Mexico’s Banxico key policy rate to remain at 6.50% through the end of the year, with the median forecast calling for USD/MXN to close 2026 at 17.90.

Latest closeDollar index 101.29 ▲0.2%

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