Mexican Peso Drops 2.5%, Reaching Its Lowest Level in Two Years

The Mexican peso leads losses in the foreign exchange market due to growing fears that the United States is approaching a recession and that a Federal Reserve interest rate cut may come too late.

The Mexican peso is falling sharply this Monday morning. The local currency is leading declines, driven by investor concerns that the United States is edging closer to a recession and that a Federal Reserve rate cut might be delayed.

The spot exchange rate stands at 19.6548 pesos per dollar. Compared to Friday’s official close of 19.1624, according to data from the Bank of Mexico (Banxico), this movement represents a loss of 49.24 cents, equivalent to a 2.57% decline.

In just the last three sessions, the peso has accumulated a loss of around 5.5% after reports on Thursday showed that U.S. manufacturing activity fell to its lowest level in eight months, followed by a weak labor market report on Friday.

Mexico is highly sensitive to the outlook for the U.S. economy, its main trading partner. Additionally, the Mexican peso has been under significant pressure since the local elections on June 2, when Morena secured a landslide victory.

Since then, the peso has accumulated a loss of more than 15%.