Mexican Peso Slips as Markets Await Fed Minutes and PCE Data

Mexican Peso Weakens as US Dollar Inches Up in Expectations of Fed Minutes

The Mexican Peso (MXN) weakened slightly against the US Dollar (USD) on Wednesday as markets await the release of the Federal Reserve’s May FOMC meeting minutes. Although USD/MXN remains near year-to-date highs, traders are holding off on major moves until more clarity emerges from the central bank’s policy discussions.

The upcoming FOMC minutes are expected to provide insight into why the Federal Reserve decided to keep interest rates unchanged earlier this month, and how it views evolving risks—particularly those linked to President Donald Trump’s rising tariff measures. Policymakers have remained cautious, preferring to observe the full effects of these trade policies before considering any changes to rates.

In contrast, Mexico’s central bank, Banxico, has maintained a relatively stable policy path, reinforcing the divergence in monetary strategies between the two nations. This growing gap in expectations is increasingly influencing market sentiment toward the USD/MXN pair.

Technically, USD/MXN is testing trendline resistance, with the 10-day simple moving average (SMA) acting as a near-term ceiling for price action. Whether the pair can break higher may depend on market interpretation of the Fed’s tone in the minutes, and more importantly, the upcoming US PCE inflation report due Friday.

Investors are now balancing expectations for future Fed action with concerns over slowing global growth and tariff-driven volatility. For now, the Peso remains under slight pressure, with further direction hinging on the Fed's next move.