• Mexican Peso falls against the US Dollar amid continued geopolitical concerns and disappointing local data.
• US Dollar Index reaches a new year-to-date high of 107.06.
• Banxico Governor signals potential for further rate cuts, adding pressure on the Peso's short-term outlook.

The Mexican Peso depreciated against the US Dollar on Thursday due to risk aversion as the Russia-Ukraine conflict escalates. Also,a soft Mexican Retail Sales report and solid US jobs data weighed on the emerging market currency, which is down 1.86% in the month. At the time of writing, the USD/MXN trades at 20.39, up 0.71%.

Geopolitics continued to drive price action. Consequently, the Greenback hit a new year-to-date (YTD) high against a basket of six currencies known as the US Dollar Index (DXY). The DXY is up 0.38% near 107.06.

Therefore, the USD/MXN is printing another leg-up after the Instituto Nacional de Estadistica Geografia e Informatica (INEGI) revealed that monthly Retail Sales came in as expected but missed the mark on an annual basis.

Meanwhile, Bank of Mexico Governor Victoria Rodriguez Ceja said in a Reuters interview that the central bank would likely continue to lower interest rates due to the progress made on bringing inflation down. Hence, the Peso will remain downwardly pressured in the near term.