05.12.202516:08:55UTC+00Mexican Peso Rises to July 2024 Highs

In a notable development, the Mexican peso has appreciated to approximately 18.16 per US dollar, marking its highest value since July 2024. This rise stems from growing expectations of a more lenient monetary policy in the United States, which boosts Mexico's attractiveness for carry trades. Financial markets are now anticipating a high likelihood of the Federal Reserve easing measures by December, which in turn lowers external financing costs for emerging markets and diminishes support for the US dollar. Concurrently, Mexico's unemployment rate remained steady at 2.6% in October, indicating a robust labor market. Additionally, the country's return to a trade surplus in goods for October injected a fresh supply of US dollars into the economy, further bolstering the peso. In the midst of these developments, Banxico's downward revision of its year-end inflation forecasts reassures investors of the ongoing disinflation process, supporting a favorable real policy rate. This environment encourages continued inflows into the peso, contributing to the currency's strength.