• Mexican Peso consolidates as traders anticipate a 25-basis-point cut from Banxico.
• US inflation data hints at halted disinflation, potentially influencing Fed's future decisions.
• Federal Reserve officials continue to remain cautious regarding December’s meeting.

The Mexican Peso wavers against the US Dollar on Thursday after snapping three days of losses on Wednesday. Traders await the Bank of Mexico (Banxico) monetary policy decision. Along with solid data from the US hinting that disinflation has halted, this capped the Peso’s recovery. The USD/MXN trades at 20.50, virtually unchanged.

Market participants await Banxico's decision, though the majority have priced in a 25-basis-point (bps) rate cut from 10.50% to 10.25%. The decision will be announced at 19:00 GMT, and the statement is expected to provide reasons behind the board’s decision and forward guidance.

Nevertheless, the latest inflation reading failed to justify Mexico’s central bank decision, as the headline Consumer Price Index (CPI) rose to 4.76% YoY. However, the core CPI has fallen to 3.80%, down for the tenth consecutive month since the beginning of 2024.

It would be interesting if the decision were unanimous after Deputy Governor Jonathan Heath voted to hold rates unchanged at the September 26 meeting. Most of the Governing Council adopted a dovish stance, justifying their decision on core prices moving toward the bank's 3% goal, but mainly on the economy showing signs of weakness.