Mexican Peso Takes a Hit: Down 1.45% Against the Dollar in October
he peso has now fallen for four consecutive sessions, breaking above the key 18.50 level that had previously held firm.
Quick overview
- The Mexican peso weakened against the U.S. dollar, closing at 18.5796 pesos per dollar, marking a decline of 0.17%.
- This decline was influenced by a stronger dollar and disappointing domestic economic data, including a 0.3% GDP contraction in the third quarter.
- The peso has fallen for four consecutive sessions, breaking the key 18.50 level and resulting in a monthly loss of 1.45%.
- Market expectations for a Federal Reserve rate cut in December have diminished, contributing to the dollar's strength.
The Mexican peso weakened against the U.S. dollar in the final session of the week, pressured by a stronger greenback and a weak domestic economic report — factors that deepened its accumulated losses for the month.
The exchange rate closed at 18.5796 pesos per dollar, compared with 18.5476 in the previous session, according to official data from the Bank of Mexico (Banxico). That represented a decline of 3.20 centavos, or 0.17%.
Throughout the day, the dollar traded between a high of 18.5966 and a low of 18.5235 pesos. The U.S. Dollar Index (DXY) — which tracks the greenback against six major currencies — rose 0.18% to 99.72 points.
The peso has now fallen for four consecutive sessions, breaking above the key 18.50 level that had previously held firm. Today’s close marks a monthly loss of 26.49 centavos, or 1.45%, compared with 18.3147 pesos at the end of September.
Dollar Strength
The dollar gained ground after traders scaled back expectations for another Federal Reserve rate cut in December. Fed Chair Jerome Powell said Wednesday that another reduction was “not guaranteed.”
According to Powell, an increasing number of Fed officials are inclined to delay further easing. Dallas Fed President Lorie Logan echoed that sentiment Friday at a banking conference, stating that policymakers should not move forward with another cut in December.
The peso’s weakness was driven by this dollar strength, as markets adjusted to the possibility that the Fed may keep rates steady longer than expected.
Weak GDP Data
On the domestic front, preliminary figures released Thursday showed that Mexico’s GDP contracted 0.3% in the third quarter compared with the April–June period, based on seasonally adjusted data. On an annual basis, GDP fell 0.2% in original terms.
The national economy’s decline was mainly due to a sharp drop in industrial activity, reinforcing perceptions of an economic slowdown that could extend into 2026.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save