• Mexican Peso ignores upbeat growth data as inflation dip hints at lower interest rates.
• INEGI reports Q3 GDP growth exceeding expectations and a drop in mid-month November inflation, suggesting room for Banxico to ease policy further.
• US economic data, including better-than-expected S&P Global Flash PMIs and UoM Consumer Sentiment, bolstered the US Dollar.

The Mexican Peso retreats for the third straight day versus the US Dollar, although economic data suggests the country’s economy grew in the third quarter while inflation edged lower. However, upbear US data coupled with risk aversion boosted the USD/MXN higher, trading at 20.45, gaining 0.27%.

In Mexico, the Instituto Nacional de Estadistica Geografía e Informatica (INEGI) revealed the final Reading of the Gross Domestic Product (GDP) for Q3 2024, which exceeded estimates in quarterly and yearly numbers. At the same time, November’s Mid-month inflation was below the previous month’s reading and estimates in headline and core, hinting that the Bank of Mexico (Banxico) could continue to ease policy.

The US economic docket revealed that business activity improved, according to S&P Global Flash PMIs for November. Meanwhile, the University of Michigan (UoM) Consumer Sentiment in November improved compared to its previous reading, while inflation expectations for one year dipped.

This and geopolitical jitters underpinned the USD/MXN toward new weekly highs of 20.55. It is worth noting that Mexico’s Chamber of Deputies approved the dissolution of autonomous bodies, which, according to experts, puts Mexico at risk of being taken out of the USMCA free trade agreement.