Mexican Peso Declines for Third Consecutive Day Amid Middle East Tensions

The possibility of direct U.S. involvement in a war with Iran is viewed by analysts and traders as a worst-case scenario for markets.

Written by: Ignacio Teson • Thursday, June 19, 2025 • 1 min read

• Last updated: Thursday, June 19, 2025

Quick overview

The Mexican peso weakened slightly to 19.0416 pesos per dollar amid rising geopolitical tensions.
Investor anxiety is driven by the escalating conflict between Israel and Iran and the potential for U.S. airstrikes on Iranian nuclear facilities.
The Mexican stock market experienced sharp losses, with the S&P/BMV IPC index falling 1.17% due to market unease.
The Federal Reserve's decision to hold interest rates steady has left the door open for potential cuts in 2025.

The Mexican peso weakened slightly in Thursday’s trading, as geopolitical tensions rattled markets. Investor anxiety centered around the escalating conflict between Israel and Iran, and the growing possibility that the United States could join airstrikes targeting Iranian nuclear facilities.

The exchange rate closed the day at 19.0416 pesos per dollar, compared to 19.0355 the previous day, according to official data from the Bank of Mexico (Banxico). This represents a marginal loss of 0.03% for the peso—less than one cent.

During the session, the dollar traded in a range between a high of 19.1182 and a low of 19.0187 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, slipped 0.09% to 98.79.

USD/MXN

Geopolitical developments are at the forefront of investor concerns. The possibility of direct U.S. involvement in a war with Iran is viewed by analysts and traders as a worst-case scenario for financial markets.

The peso’s decline also came a day after the Federal Reserve opted to hold interest rates steady for a fourth consecutive meeting—an outcome widely expected by the market. The Fed signaled it still anticipates two rate cuts in 2025, suggesting a cautious stance that leaves the door open for easing in the second half of the year. “It’s a moderate pause that keeps the possibility of future cuts alive. The Fed is in no rush, but stands ready to act,” analysts noted.

Mexican Stock Market Tumbles on Geopolitical Jitters

Mexico’s stock exchanges posted sharp losses Thursday, driven by market unease over the potential escalation of conflict in the Middle East.

The benchmark S&P/BMV IPC index of the Mexican Stock Exchange (BMV), which tracks the most actively traded local shares, fell 1.17% to 56,068.16 points. The FTSE BIVA index, operated by the Institutional Stock Exchange (Biva), dropped 1.11% to close at 1,133.22 points.

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ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.