Mexican Peso Gains After Banxico Meeting

The Mexican peso strengthened to 17.21 per USD from the near four-month low of 17.60 reached on July 24th after Banxico kept its benchmark interest rate unchanged at 6.50% and signaled that it expects to maintain the current policy stance. The central bank held rates steady for a second consecutive meeting as policymakers balanced falling headline inflation and weaker economic activity against persistent services inflation and risks from the Middle East conflict. Banxico reiterated that future decisions will depend on incoming data and highlighted uncertainty surrounding geopolitical tensions and global trade policies. The peso continued to benefit from a wide interest rate differential, with Mexico’s policy rate at 6.50% compared with the Federal Reserve’s 3.50%-3.75% target range.


