By Felipe Barragán, Expert Research Strategist at Pepperstone
September 27, 2025 –
“The Mexican Peso edged higher on Friday, benefiting from softer US inflation data that reinforced bets for further Federal Reserve easing. August’s core PCE came in line with expectations, fueling speculation of two more rate cuts by year-end. This weaker dollar backdrop supported the peso, helping it recover some ground and positioning it to close the week broadly flat.
However, domestic factors could limit its upside. Yesterday, Banxico delivered a widely expected 25 bps rate cut, bringing the benchmark rate to 7.50%. While the central bank maintained its inflation convergence outlook for Q3 2026, it acknowledged upside risks tied to peso depreciation, geopolitical tensions, and persistent core inflation.
Today’s trade figures for August also disappointed. The trade deficit widened sharply to USD 1.94 billion, the largest since January, driven by a sharp drop in the surplus of non-oil goods and a deeper oil-related deficit. Despite a 7.4% annual rise in total exports, gains were uneven.
Looking ahead, investors will focus on next week’s business confidence, manufacturing PMI, and fixed investment data for fresh signals on Mexico’s economic trajectory. While any upside surprise could boost the peso, soft data could put selling pressure on the currency.”