Mexican Peso Rises Against the Dollar Ahead of Bank of Mexico Decision
Traders adjusted their bets on the Federal Reserve’s next move, still leaning toward a 25-basis-point rate cut in December.
Quick overview
- The Mexican peso strengthened against the dollar, closing at 18.5904 pesos per dollar after hitting a two-month low.
- U.S. private sector employment rose by 42,000 jobs in October, surpassing expectations and influencing market sentiment.
- Traders are anticipating a 25-basis-point rate cut by the Federal Reserve in December, with a 63% probability according to CME's FedWatch tool.
- Mexican stock markets reached record highs, driven by strong third-quarter earnings and renewed global investor optimism.
The Mexican peso regained ground against the dollar on Wednesday after hitting its weakest level in two months, as traders digested stronger-than-expected U.S. private employment data.
The exchange rate closed at 18.5904 pesos per dollar, according to official data from the Bank of Mexico (Banxico), marking a 0.35% gain from Tuesday’s close of 18.6563. The dollar traded between a high of 18.7702 and a low of 18.5722 pesos. Meanwhile, the U.S. Dollar Index (DXY) slipped 0.03% to 100.18.
Private sector employment in the U.S. increased by 42,000 jobs in October, beating forecasts of 28,000 and following an upward revision to 29,000 in September. The figures gained extra weight in the absence of official labor data amid the U.S. government shutdown.
Traders adjusted their bets on the Federal Reserve’s next move, still leaning toward a 25-basis-point rate cut in December with a 63% probability, according to CME’s FedWatch tool.
Locally, the peso found support after data showed gross fixed investment fell 2.7% in August from the previous month and 10.4% year-over-year, reflecting weaker domestic demand. Investors now await Banxico’s monetary policy announcement on Thursday, with expectations of another rate cut.
Mexican Stocks Hit Record Highs After Three-Day Slide
Mexican stock markets closed higher on Wednesday, reaching new record levels after three straight sessions of losses. The rally was driven by strong third-quarter earnings results that beat market expectations and renewed global investor optimism.
The S&P/BMV IPC, the main index of the Mexican Stock Exchange (BMV), climbed 1.58% to 63,378.51 points, marking its 15th record high of 2025. Meanwhile, the FTSE-BIVA, from the Institutional Stock Exchange (BIVA), advanced 1.47% to 1,262.77 points, its 11th record of the year.
- 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