Mexican Peso Strengthens as U.S. Dollar Weakens

Written by: Ignacio Teson • Friday, February 21, 2025 • 1 min read

The Mexican peso appreciated as the U.S. dollar weakened, trading between a high of 20.4748 and a low of 20.2937 units.

The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, fell 0.78% to 106.35 points.

External Boost for the Peso

A key factor behind the peso’s gain was an unexpected rise in U.S. jobless claims. Initial unemployment claims rose to 219,000 last week, surpassing the expected 215,000, with the previous week’s figure revised upward to 214,000 from 213,000.

This data eased inflation concerns, providing temporary relief for the peso. However, markets remain cautious about Donald Trump’s tariff policies, which could affect trade and investor sentiment.

Despite the peso’s recent strength, global volatility and trade conflicts remain significant risks, particularly given Mexico’s economic vulnerabilities.

Local Interest Rates and Economic Signals

On the domestic front, INEGI reported that retail sales grew by 0.1% in December, defying analysts’ expectations of a 0.4% decline. This suggests stronger-than-expected consumer spending.

Meanwhile, minutes from Banxico’s latest monetary policy meeting indicated that the central bank may continue cutting interest rates in future sessions, potentially by a similar magnitude to the most recent 50 basis point reduction.

Mexico Stock Market

Meanwhile, Mexican stock markets ended Thursday’s session with moderate gains, supported by retail sales data and the release of Banxico’s meeting minutes.

The benchmark S&P/BMV IPC index, which tracks the most-traded local stocks, rose 0.38% to 54,303.93 points, while the FTSE BIVA index gained 0.40% to 1,094.92 points.

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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.