• Mexican Peso drops 0.5% following Mexico's cooler inflation and stronger economic growth indicators.
• Banxico's January minutes would be scrutinized by traders on speculation of an imminent policy easing.
• Fed's cautious stance on rate cuts contrasts with Mexico's potential monetary easing, favoring USD/MXN upside.

The Mexican Peso trips down and falls against the US Dollar in early trading during the North American session on Thursday. Mexico’s economic docket featured an inflation report, the Gross Domestic Product (GDP), and the release of the January meeting minutes of the Bank of Mexico (Banxico). The USD/MXN exchanges hands at 17.12, up 0.5%.

Mexico’s National Statistics Agency (INEGI) revealed that inflation cooled down in the first half of February as the Consumer Price Index (CPI) plunged in monthly figures, which exacerbated a slowdown in yearly numbers. The same report depicted that Core inflation increased less than estimates, while other data revealed the economy grew a tick higher than expected, portraying a solid economic outlook.

The surprise on inflation sponsored the USD/MXN leg up as Banxico’s rate cut bets increased. Some officials expressed that Mexico’s Central Bank could begin to ease policy toward the March meeting. Recently, Banxico revealed its monetary policy minutes, which would be greatly scrutinized by traders.

Across the border, the Minutes of the US Federal Reserve (Fed) meeting showed that policymakers remain hesitant to cut rates amidst fears of a second round of inflation. Recently, the US Bureau of Labor Statistics (BLS) revealed that unemployment claims rose below estimates, while business activity, despite moderating, expanded