The Mexican peso closed the week with a gain of more than 1%, with the dollar ending at 16.60 pesos.

With a close of 16.7845 pesos last Friday, the accumulated movement in favor of the peso this week was 18.01 cents, equivalent to 1.07%.

Ignacio Teson•Friday, May 17, 2024•1 min read

Hopes for a Federal Reserve rate cut this year and a comment from Banxico Deputy Governor Irene Espinosa benefited the currency.

The Mexican peso ended Friday’s trading with gains, advancing for the third consecutive session. The local currency was boosted by hopes that the Federal Reserve will cut rates this year, resulting in a strong weekly improvement.

The exchange rate ended the day at 16.6044 pesos per dollar. Compared to an official rate of 16.6818 pesos yesterday, according to data from the Bank of Mexico (Banxico), this represented a gain of 7.74 cents, equivalent to 0.46%.

The dollar traded in a narrow range between a high of 16.7255 pesos and a low of 16.6000 pesos. The Dollar Index (DXY) from the Intercontinental Exchange, which measures the greenback against six major currencies, edged up 0.01% to 104.47 points.

USD/MXN

This week, the peso benefited from U.S. economic data showing a higher probability of a Federal Reserve rate cut, particularly a consumer inflation figure below expectations.

Locally, the peso was supported by a comment from Banxico Deputy Governor Irene Espinosa, who stated that there is no urgency to cut the key interest rate. Next week, investors are looking forward to a local inflation report.

In this context, the currency recorded a significant weekly gain. With a close of 16.7845 pesos last Friday, the accumulated movement in favor of the peso this week was 18.01 cents, equivalent to 1.07%.

Over the weekend, we expect the exchange rate to oscillate around 16.57, considering the strength of the peso while awaiting inflation figures next week.

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ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.