Mexican Peso Gains Strength Ahead of Close U.S. Election

The exchange rate closed the day at 20.1512 pesos per dollar, up from 20.2768 on Friday.

Written by: Ignacio Teson • Tuesday, November 5, 2024 • 1 min read

• Last updated: Tuesday, November 5, 2024

The Mexican peso gained ground at the start of the week, recovering from its lowest level against the U.S. dollar in over two years, which it reached on Friday.

This appreciation comes just a day before the U.S. elections, where voters will decide if Donald Trump returns to the White House.

The exchange rate closed the day at 20.1512 pesos per dollar, up from 20.2768 on Friday, according to official data from the Bank of Mexico (Banxico). This movement marked a recovery of 12.56 cents, or 0.62%.

Throughout the day, the dollar’s price fluctuated between a high of 20.1714 pesos and a low of 19.9561 pesos. The U.S. Dollar Index (DXY) on the Intercontinental Exchange, which compares the greenback to a basket of six currencies, dropped 0.39% to 103.90 points.

USD/MXN

The peso hit its lowest level in more than two years on Friday as investors adjusted positions ahead of the closely contested U.S. election, fueling concerns over a possible Trump victory. The former president and Republican candidate has frequently threatened new tariffs on Mexican products, among other protectionist measures, and has called for renegotiating the USMCA agreement, which is up for review in 2026.

However, the election remains uncertain, and the exchange rate shows mixed signals: the peso reflects the belief that Kamala Harris still has a chance, along with reduced short positions after hitting 20.29.

After Tuesday’s election, attention will shift to the Federal Reserve’s monetary policy decision on Thursday and the release of local inflation figures. In the meantime, volatility is expected, according to Intercam Casa de Bolsa.

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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.