Quick overview
The Mexican peso weakened against the dollar in the first trading session of the week. The local currency lost ground amid weak domestic industrial activity data and ongoing trade concerns, as markets await U.S. inflation figures.
The exchange rate closed at 18.6800 pesos per dollar. Compared to Friday’s close of 18.6014 pesos, according to official data from the Bank of Mexico (Banxico), this represents a loss of 7.86 cents, or 0.42%.
The dollar traded within a range of 18.6935 pesos at the high and 18.5713 pesos at the low. The U.S. Dollar Index (DXY), which measures the currency against six major peers, rose 0.32% to 98.49.
Locally, INEGI reported that Mexico’s industrial activity declined 0.1% month-over-month in June and 0.4% year-over-year. These figures weighed on the peso, which was already adjusting after Banxico’s 25 basis point interest rate cut on Thursday.
USD/MXN
On the trade front, U.S. President Donald Trump announced a 90-day extension of the tariff truce with China. The deal was reached just hours before tariffs on Chinese goods were set to rise back to triple-digit rates.
Market Outlook and Drivers
This week’s key U.S. economic indicator is July’s consumer inflation data, which will be closely watched for clues on the Federal Reserve’s monetary policy, especially amid growing bets on a rate cut in September.
The tariff truce extension could boost risk appetite on trading floors by allowing more time to resolve disputes. The market will be closely monitoring the U.S. CPI release tomorrow.
The peso’s depreciation comes alongside a strengthening dollar amid expectations that U.S. consumer inflation for July will accelerate for a third consecutive month, reaching 2.8% — its highest level since February.
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
