EUR/MXN settles below 6 1/2-week high, posts weekly loss

The EUR/MXN currency pair settled below recent high of 22.1890, its strongest level since May 8th, in the wake of the Mexican central bank’s policy decision and after the release of French and Spanish inflation figures.

Banco de México cut its key policy rate by 50 basis points to 8% at its June meeting, with annual inflation rising to 4.51% by mid-June and the local economy growing moderately in April.

The central bank indicated that it could continue with similar 50 bps reductions, as the disinflation process is expected to allow some further monetary easing.

Still, Banco de México said it would proceed with caution amid elevated global uncertainty, ranging from trade tensions to geopolitical conflicts, which could either reignite inflation through Peso depreciation or lead to deeper economic slowdown.

At the same time, France’s annual consumer inflation picked up to 0.9% in June, preliminary data showed, from 0.7% in May (the lowest rate since February 2021).

And, Spain’s annual CPI inflation picked up to 2.2% in June from 2% in May (the lowest rate since October 2024).

The data could add to speculation that the European Central Bank is moving closer to the end of its monetary easing cycle.

The EUR/MXN currency pair settled 0.22% lower at 22.0494 on Friday.

The exotic Forex pair lost 0.21% for the week.