The Mexican peso traded around 17.4 per USD, weakening from the six-month high of 17.25 reached on April 15th, after new data pointed to cooling inflation. Annual inflation slowed to 4.53% in the first half of April 2026 from 4.63% in March, despite higher global energy prices driven by the conflict in Iran. Core inflation also declined, falling to 4.27%—a five-month low—from 4.46%. This moderation in price pressures has strengthened expectations of a more dovish stance from the Bank of Mexico, putting additional downward pressure on the peso against the US dollar. The central bank had already surprised markets at its latest meeting with a 25 bps rate cut, bringing the policy rate down to 6.75%, its lowest level in nearly four years. Even so, the peso remained 3.6% stronger year-to-date, supported in part by carry-trade demand from US investors.