Mexican Peso sees late dip against US Dollar, end week positively amid Fed speculations

• Mexican Peso sees modest losses as US inflation data tempers Fed easing expectations.
• Industrial Production in Mexico shows resilience, reinforcing views on potential Banxico rate adjustments.
• Deputy Governor Omar Mejia hints at upcoming rate cuts, with a focus on maintaining restrictive monetary policy.
• US Industrial Production recovery and shifts in consumer sentiment barely move the USD/MXN currency pair.

The Mexican Peso depreciated against the US Dollar late on Friday’s session yet is still set to finish the week on a higher note, with gains of 0.50%. Today’s main driver is traders repricing a less dovish Federal Reserve (Fed) following the release of ‘warm’ inflation figures. Therefore, the USD/MXN trades at 16.70, clocking gains of 0.04%.

Mexico’s weekly economic docket witnessed the release of Industrial Production data, which showed a slight improvement despite dealing with high-interest rates of 11.25% set by the Bank of Mexico (Banxico). Two days ago, Banxico’s Deputy Governor, Omar Mejia, commented that a rate cut is possible, adding that it’s not premature and that despite decreasing interest rates, it doesn’t mean monetary policy is not restrictive. The Mexican Central Bank’s next meeting will be on March 21, and market participants anticipate a 25-basis-point rate cut.