• The Mexican Peso trades mildly higher as risk appetite improves on Thursday. 
• Disappointing Nvidia earnings had weighed on equity markets during the Asian session, but they are recovering. 
• Mexico’s high interest rates still attract carry-trade inflows, despite the Peso weakening. 

The Mexican Peso (MXN) trades marginally higher in its key pairs on Thursday as market sentiment improves heading into the European session, benefiting the risk-on MXN. European equities are trading modestly higher after a shaky start as investors get over the bitter aftertaste of disappointing Nvidia earnings. 

The Mexican Peso is rising the most against the Euro (EUR) after the release of preliminary Spanish Consumer Price Index (CPI) data for August revealed a sharper-than-expected slowdown of inflation in Spain, one of the member states with higher levels of inflation in the Eurozone. Several key German states also published inflation data ahead of the release for the whole of Germany later today, signaling that price pressures are abating as well in the Eurozone’s largest economy.

The data suggests the European Central Bank (ECB) is more likely to continue cutting interest rates, which is negative for the Euro as it would lower foreign capital inflows.