The Mexican peso remains steady at 17.05 per dollar following the release of the Fed minutes.

The Mexican peso started the day steady on Wednesday, February 21st, trading at 17.05 per dollar, although briefly reaching the range of 17.07 per dollar at the beginning of the day.

The release of the minutes from the latest meeting of the United States Federal Reserve set the tone for the day in the Mexican exchange rate, as the market was attentive to new signals about interest rate adjustments. The news had few real effects on the quotation, which did not return to its intraday highs.

Most Federal Reserve officials expressed concern in the January meeting about the risks of cutting interest rates too soon, with uncertainty about how long borrowing costs should remain at their current level, according to the minutes.

While “the majority of participants highlighted the risks of moving too quickly in easing monetary policy,” only “a couple (…) pointed out the downside risks to the economy associated with maintaining excessively restrictive monetary policy for too long.”

USD/MXN

The Mexican peso has earned the nickname ‘super peso’ after recording a record rise of nearly 13% against the US dollar in 2023. This positioned it as one of the best-performing emerging market currencies worldwide. However, the outlook for 2024 is not as promising for the Mexican currency.

What will happen with the peso in the coming months? It’s difficult to predict, but what seems clear is that there will be two key factors this year that will inevitably influence its exchange rate: the electoral landscape in the United States with a possible return of Donald Trump to the White House and potential interest rate cuts by the United States Federal Reserve (Fed).

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Gabriel Micillo

Gabriel is a certified public accountant graduated from UNNE (National University of the Northeast, Argentina) and a software developer, currently pursuing a Master's degree in Finance and Economics. With nearly 8 years of experience working for accounting firms and brokerage firms. Concurrently, he has produced economic and financial reports on the current state of regional economies for the clients of the establishments where he has worked. Additionally, he assisted colleagues like Ignacio Teson in the drafting and editing of articles on similar topics in English language.