The Mexican peso strengthened to near 16.98 per U.S. dollar, staying close to the more than two-year high of 16.91 reached on September 4. Mexico’s industrial production increased 2.7% year over year in July 2026, exceeding expectations for a 1.8% gain and reaching its highest level since April 2024. Gross fixed investment also rose 7.7% in June, above the 4.8% forecast. Banxico (Mexico’s central bank) kept its key interest rate at 6.50% and said the economy rebounded in the second quarter of 2026. The stronger data could encourage a more hawkish policy stance and support foreign capital inflows through exports. The dollar, however, found support from expectations that the Federal Reserve could raise interest rates in September. Slightly stronger-than-expected monthly core U.S. CPI and elevated headline inflation linked to higher energy costs reinforced that view. A U.S. rate increase would narrow the interest-rate differential between the United States and Mexico.