• Mexican Peso gains traction against the US Dollar, spurred by an uplift in global risk appetite and a softer Greenback.
• Wall Street responds favorably to President-elect Donald Trump's market-friendly Treasury Secretary appointment, influencing broader market trends.
• INEGI reports progress in Mexico’s disinflation process and a deceleration in Q3 GDP growth, fueling speculation of potential Banxico rate cuts.

The Mexican Peso begins the week on the front foot against the US Dollar due to an improvement in risk appetite and overall US Dollar weakness. US President-elect Donald Trump's pick of Scott Bessent as Secretary of the Treasury was cheered by investors with global equities trading in the green. The USD/MXN trades at 20.30, down by 0.45%.

Wall Street rallied after Trump chose the hedge fund manager since he is deemed a market-friendly pick. Consequently, the Greenback is heavy, losing over 0.40% as depicted by the US Dollar Index (DXY). The DXY dropped beneath the 107.50 mark, undermined by falling US Treasury yields.

Last Friday, the Instituto Nacional de Estadistica, Geografia e Informatica (INEGI) revealed that the disinflation process in Mexico is evolving, approaching the Bank of Mexico's (Banxico) 3% inflation goal. At the same time, despite growing, the Gross Domestic Product (GDP) dipped from 2.1% to 1.6% QoQ in the third quarter, indicating the economy's deceleration.

Kimberley Sperrfechter, EM Economist at Capital Economics, revealed, “The good inflation data raises the possibility of a 50 basis point cut by Banxico in December.” She added that their base case is for a 25 basis points cut, “given the strong Q3 economic activity and upward pressure on US interest rates.”