Mexican Peso Loses 23% Against the Dollar in Its Worst Year Since 2008

After a year of significant fluctuations and without key indicators to absorb, investors remain cautious in the face of an uncertain outlook.

The Mexican peso closed 2024 with a sharp accumulated loss against the dollar, its largest since 2008. Following a year of wide movements and no relevant indicators to interpret, investors maintained the exchange rate above 20.80 amid an uncertain landscape.

USD/MXN

The USD/MXN ended the day at 20.8829 units per dollar, compared to 16.9666 units at the close of 2023. The Mexican currency saw a decline of 3 pesos and 91 cents, or 23.08%, based on data from the Bank of Mexico.

Mexican Peso Performance

It is worth noting that this year, the dollar reached a high of 20.9080 on Tuesday, surpassing the previous record of 20.83 set after Donald Trump’s electoral victory. The peso had fluctuated between highs and lows, but at the start of the year, it had the best global performance against the dollar among major currencies. However, many of the factors that supported the trend of the so-called “super peso” faded, and the currency has since been fluctuating freely.

The favorable conditions that allowed the peso to outperform have gradually dissipated, pushing the local currency from 16.26 to 20.80 in the interbank market.

Mexican Peso Projections and Outlook

2025 will be a year of significant challenges, especially due to geopolitical escalations, and decisions made at the beginning of Donald Trump’s second term could exert a strong influence. Caution will prevail as expectations either materialize or deviate.

The Bank of Mexico’s high interest rate, which reached a record 11.25%, had supported the peso’s strength against the dollar. However, following a series of rate cuts, the rate has now dropped to 10%, with the central bank forecasting further reductions.

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ABOUT THE AUTHOR See More
Ignacio Teson
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.
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