The Mexican peso is leading the rebound again in Latin American currencies this week, as a weaker USD and improving economic data in terms of top commodities importer China propped up metal prices. MSCI's index for Latin American currencies (^MILA00000CUS) rose over 1% after falling 1.5% last week. The Mexican peso has soared more than 50% between early 2020 and July this year, demonstrating the strongest rally by a major world currency over the pandemic and post-pandemic period.

USDMXN rose 1.7%, during its first session of gains in 8 after data showed the country's industrial output is still strong, rising 0.5% in July from June, beating market expectations of 0.4% growth.

Meanwhile, on political front, Mexican Senator Xochtil Galvez won a poll of voters organized by the country’s opposition coalition, putting her on the path to be a presidential candidate in the 2024 election. She sees the “super peso” as harmful for the economy, outlining that the domestic currency is being propped up “artificially" by the central bank’s record-high interest rates.

Apart from LatAm news, in order to assess further regional currency prospects, Fx traders will look for a slew of U.S. economic data, including a key inflation reading later tonight, on september 13, for more clues on the odds of escaping from recession in the world's largest economy as well as the subsequent outlook for Fed’s interest rate hikes going forward.