Quick overview

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The Mexican peso lost ground against the U.S. dollar on Friday as investors awaited developments in U.S.-Iran peace negotiations while digesting a fresh batch of domestic economic data.

The exchange rate closed at 17.3198 pesos per dollar, compared with 17.2963 in the previous session, according to official figures from Bank of Mexico. The move represented a decline of 2.35 centavos, or 0.14%, for the Mexican currency.

During the session, the dollar traded within a range of 17.2886 to 17.3500 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of major currencies, edged up 0.04% to 99.30.

Markets remained focused on diplomatic efforts between the United States and Iran. With mediation from Pakistan, both sides reportedly moved closer to a potential agreement to end hostilities, although disagreements over Iran’s uranium stockpiles and control of shipping through the Strait of Hormuz continued to prevent a final deal.

Mixed Domestic Economic Signals

At home, investors assessed revised economic figures showing that Mexico’s economy contracted less than previously estimated during the first quarter.

Gross Domestic Product (GDP) declined 0.6% quarter-over-quarter compared with the October–December period, while annual growth came in at just 0.2%, highlighting the economy’s ongoing slowdown.

Inflation data offered a more encouraging signal. Consumer prices moderated more than expected during the first half of May, although inflation remained above the central bank’s target range. The consumer price index rose 0.16% during the period, bringing annual inflation to 4.11%.

The latest economic data arrived shortly after Moody’s Ratings downgraded Mexico’s sovereign credit rating to Baa3, the lowest level within investment grade. The move followed a decision by S&P Global Ratings last week to revise the outlook on Mexico’s BBB rating to negative.

Weekly Performance Remains Positive

Despite Friday’s decline, the peso still posted a modest gain for the week.

Compared with last Friday’s close of 17.3428 pesos per dollar, the Mexican currency appreciated by 2.30 centavos, or 0.13%, reflecting resilience despite ongoing global uncertainty and concerns about domestic economic growth.