Mexican Peso Gains 43 Cents Against the Dollar in Seven-Day Winning Streak

Quick overview

The Mexican peso strengthened against the U.S. dollar on Tuesday, marking its seventh consecutive day of gains. The local currency rallied amid a weaker greenback, as markets digested the approval of President Donald Trump’s sweeping fiscal and spending package.

The exchange rate closed the session at 18.7307 pesos per dollar, improving from Monday’s 18.7654, according to official data from Mexico’s central bank (Banxico). This represents an appreciation of 3.47 centavos, or 0.19%.

During the session, the dollar traded within a range of 18.8252 at the high and 18.6619 at the low. Meanwhile, the U.S. Dollar Index (DXY)—which compares the dollar against a basket of six major currencies—fell 0.13% to 96.65 points.

Analysts pointed to technical support being breached at 18.70, suggesting the next key level to watch is 18.55. Resistance remains at 18.80. “We expect the recovery to continue. We recommend maintaining long peso positions,” one strategist noted.

U.S. Senate Approves Massive Fiscal Package

The peso’s recent strength also reflects market reaction to the U.S. Senate’s approval of President Trump’s tax cut and spending bill—dubbed the “One Big Beautiful Bill”—which is projected to add $3.3 trillion to the federal debt. The legislation now returns to the House of Representatives for final approval.

In this context, the peso has now gained 43.76 centavos (2.28%) since the close of June 20, when it stood at 19.1683. Tuesday’s low of 18.6619 marked the strongest intraday level since August 20.

Fed Signals Patience

Market activity was also shaped by comments from Federal Reserve Chair Jerome Powell, who reiterated that the Fed intends to “wait and see” how tariffs are impacting inflation before moving on interest rates.

“We’re just taking some time,” Powell said during a central banking conference in Portugal—this after President Trump reportedly sent him a handwritten note urging action and pointing out that other central banks have already cut rates.

Peso Outlook: Analysts Expect 7% Decline by Year-End

In Mexico, Banxico’s latest survey of private-sector analysts revealed expectations for a 7% depreciation in the peso from current levels by year-end, forecasting the exchange rate to reach 20.13. Still, this is more optimistic than the 20.50 forecast from last month’s survey.

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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.

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