Mexican peso falls slightly against the dollar ahead of crucial Fed policy and US inflation data

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US Inflation Data to be Released Ahead of Key Fed Policy Announcement

Before a crucial monetary policy announcement by the Federal Reserve that could potentially mark a pause in its interest rate hike cycle, the markets will receive the latest data on US consumer prices.

Mexican Peso Slightly Depreciates Against the US Dollar

On Monday, the Mexican peso marginally depreciated against the American dollar. The local currency pulled back after hitting a new seven-year low earlier in the day and ended the day largely unchanged on a cautious market.

The exchange rate closed at 17.2724 units per dollar, according to official data from the Bank of Mexico (Banxico). This meant a loss of 0.01 percent compared to its close of 17.2716 on Friday. Throughout the session, the exchange rate operated in a limited range between 17.3360 units and 17.2413 pesos.

The Dollar Index (DXY) of the Intercontinental Exchange, which measures the dollar against six other reference currencies, gained 0.05% at the close of 103.61 points.

According to Juan Carlos Cruz, a professor at EBC, “the exchange rate continues to set new lows for the year and the cross managed to touch 17.24 units per dollar. The immediate floor is 17.20 units, and if we drill it with volume, we could go to 17 pesos.”

Markets Traded Aimlessly Ahead of US Inflation Data and Fed Meeting

Markets traded aimlessly on Monday with a prevailing sense of caution ahead of the release of US inflation data and the decisive two-day meeting of the Federal Reserve (Fed) scheduled the following day.

Analysts expect the Fed to keep its benchmark interest rate unchanged within the range of 5% and 5.25%. However, according to the tool FedWatch from CME Group, bets on futures show that there could be a rise in July.

“No significant economic information is expected today, so we anticipate that markets will continue to await this Wednesday’s announcement from the Fed, and from other central banks throughout the week,” the statement said.

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