Mexican Peso Falls to 19 Units Per Dollar

The local currency reached its worst level in over a year but later pared losses after the May inflation data from the United States was released.

The Mexican peso depreciated sharply against the dollar on Wednesday morning. The local currency fell to nearly 19 units per dollar, although the losses were reduced later following the release of May inflation data from the United States.

The spot exchange rate stands at 18.9067 pesos per dollar. Compared to a close of 18.4879 pesos, according to data from the Bank of Mexico (Banxico), this movement represents a decline of 41.88 centavos for the peso, equivalent to 2.27 percent.

The dollar’s price operates within a range between a maximum of 18.9975 pesos and a minimum of 18.5507 pesos. The Dollar Index (DXY) from the Intercontinental Exchange, which measures the greenback against six major currencies, fell 0.84% to 104.34 units.

The peso remains affected and continues to depreciate after Morena, the future president of Mexico Claudia Sheinbaum, and the current president Andrés Manuel López Obrador confirmed they would push for a controversial judicial reform.

Despite Sheinbaum Pardo mentioning multiple times that there will be a dialogue in various public spheres first, her comments have not convinced the market, which remains skeptical and has driven the peso to its lowest point since March 2023.

The peso slightly reduced its decline thanks to the May inflation data from the United States, which came in below expectations, favoring those anticipating a rate cut this year. Traders are now awaiting the Federal Reserve’s (Fed) announcement.

Specifically, consumer prices in the United States remained unchanged in May after a 0.3% increase in April. The consensus, according to a Reuters survey of analysts, was for a 0.1% increase in the fifth month of the year.