Mexican Peso Weakens Against the Dollar Following Federal Reserve Minutes
The exchange rate closed the day at 19.4145 pesos per dollar, compared to 19.2683 the previous day, according to official data.
Quick overview
- The Mexican peso depreciated against the U.S. dollar, closing at 19.4145 pesos per dollar, a loss of 0.76%.
- The dollar strengthened due to trade optimism after President Trump postponed tariffs on EU goods.
- The Federal Reserve's meeting minutes highlighted concerns about rising inflation and unemployment risks.
- Banxico downgraded Mexico's economic growth forecast for 2025 to 0.1% and cut interest rates by 50 basis points.
The Mexican peso depreciated against the U.S. dollar on Wednesday, as trade optimism boosted the greenback and investors digested the contents of the latest Federal Reserve (Fed) policy meeting minutes.
The exchange rate closed the day at 19.4145 pesos per dollar, compared to 19.2683 the previous day, according to official data from the Bank of Mexico (Banxico). This marked a loss of 14.62 centavos, or 0.76%, for the local currency.
During the session, the dollar traded in a range between a high of 19.4254 pesos and a low of 19.2591. Meanwhile, the U.S. Dollar Index (DXY)—which measures the dollar against a basket of six major currencies—rose 0.29% to 99.89.
Dollar Gains and Fed Minutes
The dollar continued to strengthen on the back of renewed trade optimism after U.S. President Donald Trump postponed his threat to impose 50% tariffs on European Union goods, opting to wait for further negotiations.
At the same time, traders analyzed the minutes from the Fed’s most recent meeting. The central bank acknowledged potential risks of rising inflation and unemployment—concerns that align with projections of increased recession risk.
The minutes served as the primary catalyst for market movement, though it’s worth noting they were recorded before the recent easing of U.S.-China trade tensions. As a result, they reflect a risk narrative that may now be somewhat outdated.
Banxico Cuts Growth Forecast
On the domestic front, Banxico once again downgraded its economic growth forecast for Mexico in 2025, lowering it to 0.1% from a previous estimate of 0.6%. The 2026 forecast was also halved, with the central bank warning that the economic outlook remains weak.
Looking ahead, markets are anticipating the release of Banxico’s own meeting minutes tomorrow. In that meeting, the central bank cut interest rates by 50 basis points to 8.50% and signaled the potential for additional cuts of a similar magnitude in future decisions.
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