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Mexican Peso on the defensive as September inflation aims toward Banxico’s 3% goal. Banxico is expected to lower rates further after cutting to 10.50% in September, with additional easing projected by the end of 2024. The Fed’s September meeting minutes, sponsored a leg-up in the USD/MXN to 19.48. The Mexican peso depreciated against the US Dollar on Wednesday following an inflation report that opened the door for further easing by the Bank of Mexico (Banxico). Meanwhile, the Federal Reserve (Fed) revealed its September Meeting Minutes. The USD/MXN trades at 19.48, up over 0.70%. Mexico’s inflation edged lower in September, according to the Instituto Nacional de Estadistica Geografia e Informatica (INEGI). Headline and Core Consumer Price Index (CPI) readings came below estimates and trended toward hitting Banxico’s 3% plus or minus 1% goal. The USD/MXN aimed higher as the data hints that Banxico could be more aggressive on its easing cycle. On Monday, Banxico Governor Victoria Rodriguez said the governing board may consider larger cuts to its benchmark rate as she spoke to Reuters. Banxico lowered rates to 10.50% in September and is expected to ease at least an additional 50 basis points (bps) toward the end of 2024. The following meetings will be on November 14 and December 19. The Fed’s September 17-18 Meeting Minutes in the US, showed that some officials would have preferred a 25-basis-point (bps) rate cut; all participants agreed on the need to lower interest rates. Regarding the Fed’s dual mandate, nearly all officials saw inflation risks tilted to the downside, whereas risks to the labor market were seen as tilted to the upside. Following last Friday’s Nonfarm Payrolls (NFP) report, Fed officials adopted a more cautious stance. On Tuesday, Vice-Chairman Philip Jefferson said he remains data-dependent and that his approach will be meeting by meeting.…

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Filed under: News - @ October 9, 2024 7:25 pm