Mexican Peso Weakens as Dollar Gains, Closes at 18.44 per Dollar
The peso continues to trade within a technical range of 18.30–18.60 per dollar, with analysts projecting mild downward pressure.
Quick overview
- The Mexican peso weakened slightly against the dollar, closing at 18.4397 pesos per dollar, a 0.16% depreciation.
- The dollar's rebound was influenced by optimism over a U.S.-Australia agreement to strengthen rare earth supply chains independent of China.
- Traders are awaiting delayed U.S. inflation data and monitoring the ongoing government shutdown, which has added to market uncertainty.
- Mexico's economy contracted 0.6% year-over-year in September, with analysts projecting mild downward pressure on the peso amid economic uncertainty.
The Mexican peso weakened slightly against the dollar on Tuesday, pressured by a stronger greenback as markets digested news of a U.S.-Australia agreement to bolster a rare earth supply chain independent of China.
The exchange rate closed at 18.4397 pesos per dollar, compared with 18.4111 on Monday, according to data from Banco de México (Banxico). That represented a 0.16% depreciation, or 2.86 centavos. During the session, the peso traded between 18.3906 and 18.4887 per dollar, while the U.S. Dollar Index (DXY) climbed 0.35% to 98.98 points.
Analysts from Monex Grupo Financiero said the dollar’s rebound was driven by optimism over the rare earth deal, which aims to reduce Western dependence on Chinese supply chains.
Traders are also awaiting the delayed release of U.S. inflation data for September, which could shape expectations ahead of the Federal Reserve’s October 28–29 meeting. The U.S. government shutdown—now on day 21—has postponed several key economic reports, adding to market uncertainty.
Optimism also grew around renewed U.S.-China trade talks and speculation about a potential end to the shutdown, according to White House adviser Kevin Hassett.
Domestic Data and Technical Indicators
On the domestic front, Mexico’s economy contracted 0.6% year-over-year in September, according to preliminary figures from INEGI’s IOAE indicator. Compared with the prior month, activity rose just 0.1%. Official IGAE data are expected tomorrow, followed by first-half October inflation figures on Thursday.
The peso continues to trade within a technical range of 18.30–18.60 per dollar, with analysts projecting mild downward pressure in the near term amid local and global economic uncertainty.
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