FX.co ★ MXN Strengthens with Emerging Market Currencies

The Mexican peso strengthened to 17.48 per USD in July from 17.63 earlier in the month, mirroring gains in other emerging-market currencies as the US dollar weakened. Risk appetite improved following indications that diplomatic talks between the US and Iran are continuing despite recent tensions, easing geopolitical concerns and curbing demand for safe-haven assets. On the domestic front, Mexico's annual inflation rate slowed to 3.37% in June 2026 from 3.94% in May, marking its lowest level since December 2020. The reading came in slightly below market expectations of 3.52% and remained within the Bank of Mexico’s target band of 3% ± 1 percentage point. At the same time, Mexico’s industrial output contracted by more than anticipated in May, but the impact on the peso was limited, as improving global risk sentiment outweighed the weaker domestic data.