• Mexican Peso dips against a strengthening US Dollar after February's US inflation report exceeds expectations.
• Mexico's Industrial Production in January meets forecasts, while US CPI figures push USD/MXN higher.
• Fed's cautious stance on policy easing was underscored by recent inflation trends with eyes on the March meeting.

The Mexican Peso loses some ground on Tuesday against the US Dollar, which appreciated following February’s inflation report in the United States that showcased price level growth remaining stubbornly high. This led to the selling of US Treasuries. Consequently, yields rose, a tailwind for the Greenback. The USD/MXN trades at 16.81, up 0.14%, after hitting a daily low of 16.76.

The National Statistics Agency, INEGI, revealed that Mexico’s Industrial Production in January expanded, aligning with the consensus. In the meantime, the US Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) for February was higher than expected in annual figures and aligned with forecasts on monthly readings. The Core CPI figures were mixed, with annual figures decelerating, while monthly data stood unchanged compared to January’s number.

The US inflation data, a key factor in the Federal Reserve's policy decisions, has justified the Fed’s stance of being patient regarding easing interest rates. Fed Chair Jerome Powell and his colleagues have expressed the need for more evidence before considering any borrowing cost cuts. The next Fed meeting is scheduled for March 19-20.