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Peso holds steady near 16.91 ahead of Mexico fiscal package
USD/MXN is at 16.91, but FXStreet notes US inflation data could push expectations toward a 25 basis point Fed hike, narrowing the Mexico-US rate gap.
The Mexican peso (MXN) was little changed versus the US dollar on Tuesday, with USD/MXN trading around 16.91 after earlier reaching 16.99, as investors awaited Mexico’s fiscal package to be delivered to Congress for approval.
Mexico’s plan, outlined by President Claudia Sheinbaum, targets fiscal consolidation while aiming to avoid restrictions on investment or spending in social welfare, health, and education, and it is tied to a “responsible” 2027 fiscal and budget framework.
The focus in Mexico’s economic calendar also includes August inflation data on Wednesday and industrial output on Friday. In the US, a light data set keeps attention on Thursday’s producer price index and Friday’s consumer price index, with FXStreet saying a jump in both could reinforce the case for a 25 basis point Fed hike.
Money markets had priced in a 63% chance of a 25 basis point hike at the September 15-16 meeting, which could reduce the interest rate differential between Mexico and the US and allow USD/MXN to reclaim the 17.00 level. FXStreet also highlighted USD/MXN’s technical picture, including price holding below key moving averages around 17.2285 and support near 16.8866, where a daily close below could extend downside.