Dollar Strength Hits Mexican Peso Two Days in a Row
According to Banco de México (Banxico) data, the peso ended the week slightly weaker, marking its second day of losses.
Quick overview
- The Mexican peso closed at 18.3878 per U.S. dollar, experiencing a slight depreciation of 0.04%.
- This marks the second consecutive day of losses for the peso, influenced by a stronger U.S. dollar and expectations regarding the Federal Reserve's monetary policy.
- Market volatility was heightened due to 'triple witching,' which typically strengthens the dollar and pressures the peso.
- On Wall Street, shares closed higher, with FedEx's strong quarterly results contributing to gains in the S&P 500 and Nasdaq.
The Mexican peso closed the final session of the week at 18.3878 per U.S. dollar, a marginal depreciation of just 0.04%, or 0.73 cents.
The peso lost ground for the second consecutive day amid a stronger U.S. dollar, recent economic data, and expectations that the Federal Reserve may not continue its easing cycle.
According to Banco de México (Banxico) data, the peso ended the week slightly weaker, marking its second day of losses. Over the past two weeks, the currency has declined 0.33% against the greenback.
The U.S. Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, advanced 0.32% to 97.66 points.
The peso’s weakness is linked to dollar strength, which reflects a combination of prior session economic data and market expectations that the Fed might halt its cycle of continuous monetary easing. The dollar’s rebound also follows corrections from prior session losses.
Market volatility was elevated during the session due to “triple witching,” the simultaneous expiration of stock options, index futures, and index options contracts, which tends to strengthen the dollar and pressure the peso.
Technical analysts note that the peso broke support at 18.35, with the next significant resistance expected around 18.50.
Wall Street Gains Amid Fed Rate Cut and FedEx Beat
Meanwhile, shares on Wall Street closed higher on Friday, posting weekly gains, as FedEx rose following strong quarterly results.
The shipping company’s stock jumped after reporting earnings and revenue above market expectations on Thursday. Cost reductions and strong domestic shipments helped offset weakness in international volumes.
The S&P 500 and Nasdaq both recorded their third consecutive week of gains, fueled by the Fed’s first rate cut of 2025 and signs of further monetary policy easing. Renewed optimism around artificial intelligence-related stocks also contributed to the rally.
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