Mexican Peso Weakens After Fed Announcement
The peso lost ground due to a broad strengthening of the U.S. dollar, as markets reacted to the Federal Reserve’s monetary policy decision and outlook.
On Wednesday, the Mexican peso depreciated against the U.S. dollar, pressured by a general uptick in the greenback following the Federal Reserve’s policy decision and economic outlook.
The exchange rate closed at 20.0540 pesos per dollar, compared to 19.9348 pesos in the previous session, according to official data from the Bank of Mexico (Banxico). This represents a depreciation of 11.92 centavos, or 0.60%.
During the session, the dollar traded within a range of 19.9018 to 20.0865 pesos. The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.20% to 103.46 points by the close.
Fed Decision and Market Reaction
As expected, the Fed kept interest rates unchanged on Wednesday. However, the central bank signaled that it still anticipates cutting rates by 50 basis points by the end of the year amid slowing U.S. economic growth.
Regarding the Trump administration’s tariff strategy, the Fed raised its inflation forecast for this year. It now expects its preferred inflation gauge to reach 2.7% by year-end, up from the 2.5% projection in December and above the long-term 2% target.
The Fed’s statement conveyed mixed signals, balancing hawkish and dovish tones. While acknowledging inflationary pressures, policymakers also expressed concerns about economic slowdown due to ongoing trade tensions.
Euro Exchange Rate Update
The euro closed the session at 21.8793 pesos, marking a depreciation of 6.12 centavos or 0.28% for the Mexican currency compared to Tuesday’s Banxico rate of 21.8181 pesos. Meanwhile, inflation in the eurozone eased to 2.3% in February, down from 2.5% in January.
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