The Mexican peso depreciated 0.11 percent against the US dollar on Thursday, 22 October, closing at 18.70 pesos per dollar. The move came amid greater global risk aversion linked to rising tensions in the US war against Iran.
Mexico’s inflation data added to the pressure. Annual inflation reached 3.62 percent in the first half of October, above analysts’ forecasts. Gabriela Siller, economic analysis director at Banco Base, said the combination reduced room for Banco de México to cut interest rates again.
Inflation complicates the rate outlook
The figure was higher than economists had expected. Tomato and squash were among the food items with the largest price increases.
Siller’s remarks pointed to a narrower path for monetary easing. A higher inflation print makes further cuts harder to justify.
Regional currencies also weaken
The South African rand fell 0.86 percent against the dollar, the largest move among the currencies cited. The Chilean peso lost 0.69 percent, the Israeli shekel 0.67 percent, the Polish zloty 0.55 percent and the Hungarian forint 0.48 percent.
Banamex quoted the dollar at 19.18 pesos for selling and 18.10 for buying. The US 10-year yield stood at 5.01 percent, while the Mexican 10-year yield was 9.27 percent.
Related: Mexican peso falls 1.15% to 18.63 per dollar · Mexican peso firms to 18.42 per dollar on Monday
Source: Bank of Mexico
