The USD/MXN currency pair edged higher on Wednesday ahead of the key US CPI inflation data that could provide further clues over the Federal Reserve’s monetary easing path.

Annual headline consumer inflation in the US probably steadied at 2.9% in January, according to market consensus.

Annual core CPI inflation probably eased to 3.1% in January.

Federal Reserve Chair Jerome Powell reaffirmed on Tuesday that there was no urgency to reduce interest rates, since the central bank’s policy stance was now significantly less restrictive and the economy was faring well.

Powell is also expected to testify before Congress later today.

“I think the CPI report today is probably going to be more telling for the market than Powell’s testimony,” Rabobank senior Forex strategist Jane Foley was quoted as saying by Reuters.

“The CPI report will perhaps add a little more flavour with respect to the chances of the Fed accelerating or decelerating its rate cutting projections.”

The USD/MXN currency pair was last inching up 0.07% on the day to trade at 20.5444.

The European Union, Mexico and Canada have condemned US President Donald Trump’s decision to impose 25% tariffs on imports of steel and aluminium.

The tariff-hit Peso was still pressured near lows last seen since March 2022 (21.2899 per dollar).