• Mexican Peso gains 0.88% against the USD as USD/MXN trades at 18.59.
• Weaker-than-expected US labor data heightens expectations for a Fed rate cut in September.
• Banxico's Deputy Governor suggests gradual rate cuts amid Mexico's slowing economic growth.

The Mexican Peso regains some composure and rallies against the Greenback as market participants await the US Federal Reserve’s (Fed) monetary policy decision. A softer-than-expected labor market report in the US weighed on the US Dollar as market participants expect the first rate cut by the Fed in September. The USD/MXN trades at 18.59, down 0.88%.

On Wednesday, the Mexican economic docket was empty, yet traders shrugged off Tuesday’s data that showed the economy is decelerating. The Gross Domestic Product (GDP) for Q2 rose 0.2% QoQ, below estimates of 0.4% and a 0.3% increase in Q1. This justified comments by Omar Mejia Castelazo, a Deputy Governor at the Bank of Mexico (Banxico), who favors lowering rates gradually and emphasized that this would not mean the bank will embark on an easing cycle.

Across the border, US economic data showed that private hiring increased less than expected, according to Automatic Data Processing (ADP) Employment Change data for July.