• Mexican Peso accelerates on high inflation data.
• Market participants divided on Banxico's next move: hold or cut rates.
• US jobless claims arrive below consensus, but Peso resists USD strength.

The Mexican Peso rose in early trading in the North American session on Thursday after the Instituto Nacional de Estadistica Geografia e Informatica (INEGI) revealed that the Consumer Price Index (CPI) in July rose above estimates ahead of the Bank of Mexico's (Banxico) monetary policy decision. The USD/MXN trades at 19.15, down 0.70%.

Mexico’s inflation rose to its highest level in more than a year, revealed INEGI, sponsoring a leg-down in the USD/MXN exotic pair as traders brace for the Banxico decision today at around 19:00 GMT. However, the core figure mostly used by policymakers as the main reference for inflation ticked lower.

Given the backdrop, market players are split between Banxico keeping rates in check, following inflation data, or opting for a cut. During the last meeting, Deputy Governor Omar Mejia Castelazo was the outlier in a 4-1 vote for maintaining rates at 11.00%. It is worth noting that Governor Victoria Rodriguez Ceja said later that rate cuts would be “on the table” in the subsequent meetings.