Mexican Peso Hits Two-Year High: Resilience Amidst Domestic Headwinds & USD Weakness

The Mexican Peso has soared to a two-year high, pushing USD/MXN to a two-year low, primarily driven by broad US Dollar weakness and strong carry trade appeal. This resilience comes despite weaker domestic retail sales, highlighting external factors overriding local economic data. Divergent central bank policies and significant interest rate differentials continue to underpin MXN strength, with technicals confirming a bearish outlook for USD/MXN.