The Mexican peso staged a strong rebound from its recent lows on Wednesday after inflation data spurred expectations that monetary policy would need to stay tight, while the Brazilian real rose to a one-week high, Reuters reported. The peso, the best performing currency in Latin America this year, was up 0.8% against the dollar, snapping a six-day losing streak. Data showed consumer prices in Mexico fell more than expected in the first half of May, with 12-month headline inflation reaching 6.00% — the lowest level since September 2021. “The slowing of inflation supports Banxico’s on-hold stance, but with this decline still being moderate also supports the bank's guidance that rates will remain elevated for a considerable time,” Juan Manuel Herrera, senior strategist at Scotiabank, said in a note. Economists expect Mexico's central bank will not cut rates before December at the earliest. The peso has risen 9.4% against the dollar this year, outpacing its regional peers, on the back of strong economic growth in Mexico and the "nearshoring" trend in which foreign companies look to bring production closer to home. The currency as well as Colombia's peso, which jumped 0.5% on Wednesday, were also boosted by a rise in oil prices as both countries are major crude exporters. The Brazilian real gained 0.4% against the dollar after Brazil's lower house late on Tuesday approved the main text for a new fiscal framework bill, a major victory for President Luiz Inacio Lula da Silva's administration. Read more.