Peso Holds Steady as Mexico’s Market Rises Ahead of Powell’s Signal

The Bank of Mexico’s recent minutes, U.S. Federal Reserve expectations, and corporate gains shaped trading in Mexico on Thursday.

The peso traded near 18.77 per dollar early Friday, steady in a narrow range, while the S&P/BMV IPC closed at 58,663.97, up 0.76 percent on volumes of 210.6 million shares.

The dollar index hovered around 98.7 as investors reduced bets on an aggressive September rate cut. Analysts said Jerome Powell is unlikely to pre-commit to policy changes at the Jackson Hole meeting.

That view pushed traders to seek safety in the U.S. currency, keeping pressure on emerging markets. Mexico’s central bank cut rates by 25 basis points on August 7 to 7.75 percent.

Minutes released Thursday showed the board remains cautious, pointing to high core inflation above 4 percent. A Reuters poll projected bi-weekly inflation in the first half of August at 3.66 percent year on year, with core near 4.27 percent.

These levels suggest inflation risks remain and limit room for faster rate cuts. The IPC gained on Thursday despite cautious global equity sentiment.

Grupo Aeroportuario del Sureste rose about 2.3 percent, Industrias Peñoles added 2.8 percent, and Arca Continental climbed 2.3 percent.

The moves reflected sector-specific strength rather than broad optimism. Traders noted muted inflows into Mexico’s main equity ETF, which manages about $1.7 billion, despite recent price gains.

Oil prices stabilized after Thursday’s rally. Brent held near $67.6 a barrel as global supply concerns lingered, while gold slipped under pressure from the stronger dollar. These shifts influenced Mexican markets less than U.S. rate speculation, which remained the dominant force.

Technically, the peso’s daily chart showed consolidation between 18.70 and 18.80, with neutral momentum. Resistance stood near 18.85 to 18.90, while support lay around 18.68.

Four-hour charts confirmed a range-bound structure with relative strength indices near 51. A break above 18.85 could expose the 19.00 level if Powell delivers a firm message.

The IPC’s daily chart showed a healthy uptrend, with the index trading above its moving averages and relative strength around 61. Shorter timeframes pointed to possible consolidation, with resistance near 58,740 and support at 58,400.

The story behind Thursday’s moves is one of restraint. Investors positioned ahead of Powell’s speech and weighed Mexico’s slower easing cycle. The peso held its ground, supported by still-attractive carry, while equities gained on domestic corporate strength.

Market participants now await inflation data and Powell’s remarks to test whether Mexico’s balance of cautious policy and resilient equities can withstand the stronger dollar.

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