Mexican Peso Strengthens, Caps a Winning Week Against the Dollar
On a weekly basis, the peso posted a solid advance. Compared with the official close of 17.420 pesos per dollar at the end of the last week.
Quick overview
- The Mexican peso strengthened against the dollar, closing at 17.2592 pesos due to improved global risk appetite.
- This represented a gain of 0.85% from the previous day's close, with the dollar trading within a range of 17.3044 to 17.5663 pesos.
- The recovery followed Banxico's decision to maintain its policy rate at 7%, highlighting inflation risks while allowing for future adjustments.
- Market focus will shift to upcoming inflation data from Mexico and U.S. labor market figures next week.
The peso strengthened on the back of a recovery in global risk appetite, as market participants digested consumer confidence data from both Mexico and the United States.
The Mexican peso advanced against the dollar in Friday’s trading session. The local currency gained support from a renewed global appetite for risk assets, while investors absorbed consumer confidence figures from Mexico and the U.S.
The exchange rate closed at 17.2592 pesos per dollar. Compared with Thursday’s official close of 17.4079 pesos, according to the Bank of Mexico (Banxico), this represented a gain of 14.87 centavos, or 0.85%.
During the session, the dollar traded in a range between a high of 17.5663 and a low of 17.3044 pesos. Meanwhile, the U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, fell 0.36% to 97.62 points.
A sense of temporary calm appeared to return to financial markets, with precious metals edging higher, equity futures recovering from their lows, and Bitcoin finding fresh buying interest.
The peso’s recovery also came one day after Banxico kept its policy rate unchanged at 7%, pausing a long easing cycle. The central bank’s statement emphasized inflation risks, while still leaving the door open to future adjustments.
On a weekly basis, the peso posted a solid advance. Compared with the official close of 17.4201 pesos per dollar at the end of the last week of January, the Mexican currency recorded a cumulative gain of 16.09 centavos, equivalent to 0.92%.
Looking ahead, market attention next week will focus on Mexico’s January inflation data, due Monday, and—on the global front—U.S. labor market figures, including nonfarm payrolls, the unemployment rate, and average hourly earnings.
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