The Mexican peso rebounded, strengthening towards 17.2 per USD from a one-month low on Jan. 23, fueled by favourable Mexican inflation data and a weaker US dollar.

Despite trader expectations for a more relaxed Banxico monetary policy, higher-than-anticipated mid-month inflation for January, at 4.9%, tempered hopes.

Economic indicators reveal a less resilient Mexican economy to tight monetary policy, with a 0.5% month-on-month contraction in November surpassing expectations.