On Flag Day, the Mexican peso has appreciated against the dollar, following the release of inflation data from the National Institute of Statistics and Geography (Inegi) which showed inflation rising to 3.92% in the first half of February. This figure puts inflation over the median estimate of 3.89% from Bloomberg analysts and up from 3.79% reported at the end of January. Despite this increase, inflation remains within the Bank of Mexico's target range of 3% +/- one percentage point, a development that influences currency valuation and market perceptions.

Victoria Rodríguez, the governor of the Bank of Mexico (Banxico), expressed that the Governing Board believes that the newly approved tariffs on products from Asia and an increase in the Special Tax on Production and Services (IEPS) should not jeopardize the trend of decreasing inflation and upcoming interest rate cuts. The report highlights the impact of these economic indicators on the peso's valuation against the dollar, emphasizing how domestic inflation and monetary policy decisions can affect currency strength.

As the peso strengthens against the dollar, this may have several implications for the Mexican economy, influencing both import and export dynamics. A strong peso can lower the cost of imports while potentially making exports less competitive. The currency's performance today is critical not only for traders and investors but also for consumers who may see varying price impacts based on currency fluctuations.