The Mexican peso closed on Thursday at 18.71 to the US dollar, its weakest level in more than a year, Mexico News Daily reports. It has lost 9.7% since 4 September, when it reached its strongest level in over two years.
Analysts see the US Federal Reserve's rate rise in September as a key cause, because it narrowed the gap with the Bank of Mexico's 6.5% rate and made carry trades into the peso less attractive. Risk aversion linked to the US-Iran war and uncertainty over the future of the USMCA trade pact have also weighed on the currency.
Mexican inflation rose to 3.62% in the first half of October. Most analysts expect the Bank of Mexico to hold rates this year, while economists polled by Reuters expect another Fed rise in December.
Source: Mexico News Daily
