Mexico Markets Steady After U.S. Inflation Print, With Peso Strength Intact

Key Points

1. The peso held firm near 17.82 per dollar as U.S. inflation data eased fears of a fresh rate shock.
2. Mexico’s equity benchmark stayed near record territory, but price action shows digestion, not a clean breakout.
3. Banxico’s cautious tone keeps carry support in place, even as politics-driven Fed headlines add tail risk.

The Mexican peso traded near 17.8181 per dollar early Wednesday, extending a firm tone that has defined recent sessions, while the S&P/BMV IPC hovered around 66,294.

The backdrop was a calmer dollar after Tuesday’s U.S. inflation report and a market that is still willing to pay for yield, but no longer willing to chase risk without limits.

U.S. consumer prices rose 0.3% month over month in December, leaving headline inflation at 2.7% year over year and core at 2.6%.

The numbers were close enough to expectations to cool the idea that the Fed must tighten further, helping the dollar stabilize with the dollar index near 99.1. That matters for Mexico: when U.S. yields stop climbing, the peso’s rate advantage becomes harder to ignore.

Still, traders are not treating the session as a one-way bet. One local desk described the dollar as moving “without a clear direction” after CPI, while another warned that a sustained break could open the door toward 17.80, though it called that outcome unlikely in the near term.

Banxico’s own message supports that caution: after cutting rates to 7.00%, minutes emphasized inflation risks tied to new taxes and trade frictions, a stance that can slow further easing and preserve carry.

Technicals reinforce the “strong peso, but stretched” setup. On the 4-hour chart, USD/MXN looks oversold, with momentum consistent with a potential snapback on headlines.

On the daily chart, the downtrend remains intact unless the pair reclaims 18.00–18.06; near-term support sits around 17.80–17.78, with bigger resistance above 18.17–18.28 and 18.39.

For equities, the IPC’s uptrend is still constructive, but the market is consolidating near resistance around 66.3k–66.9k, with support clustered in 65.9k–65.3k and deeper levels near 64.7k and 63.8k.

The U.S.-listed Mexico ETF EWW traded near $71.97 on roughly 1.23 million shares, echoing resilient international demand even as near-term flows wobble.

Next up: Banxico’s weekly placement targeting MXN 38.7 billion in Cetes, plus a global risk tape shaped by a firm Asian session, yen weakness, and renewed geopolitical tension.