FX.co ★ Mexican Peso at 1-Month Low

The Mexican peso is currently trading at approximately 18.5 per US dollar, marking its lowest point in a month, largely due to diminished risk appetite amid the US government shutdown and prevailing global uncertainties. Domestically, Mexico's inflation rate has edged up to 3.76%, which is slightly below the anticipated 3.79% but still comfortably within the Bank of Mexico's target range of 2% to 4%. Recent minutes from Banxico's September meeting highlighted a sluggish economic environment, alongside a dovish outlook from the Federal Reserve, indicating the potential for further monetary easing. Looking forward, the forthcoming review of the United States-Mexico-Canada Agreement (USMCA) next year is anticipated to enhance investor confidence and bolster demand for Mexican exports, thus supporting the peso. Under the USMCA, Mexico continues to enjoy the advantage of lower tariffs compared to other US trade partners.