The Mexican peso strengthened to its best level since May 2024, pushing USD/MXN down to 16.92; the pair was down 0.22% on the day and 0.50% over the week. The move tracked a softer US Dollar, with the US Dollar Index (DXY) flat at 98.84 on Friday but lower by more than 0.80% for the week. Support also came from carry dynamics, as the interest-rate differential stood at 275 basis points in favour of Mexico.
Mexican and US Economic Data
Domestic data were mixed. Retail sales fell 0.2% month on month in June after a 0.6% contraction in May, undershooting expectations for a 0.1% rise; in the 12 months to June, sales growth increased from 1.6% to 2.7% but missed a 3.1% forecast. Banxico minutes indicated a cautious stance on rates and referenced upside inflation risks. In the US, S&P Global data showed services activity improving in August while manufacturing growth moderated.
Upcoming Economic Events
Next week’s focus includes Mexico’s first-half August inflation, second-quarter GDP and the current account, while the US calendar features sanctions announcements on Monday, the PCE report, BLS preliminary benchmark revisions, and Fed Chair Warsh at Jackson Hole.
