Mexican Peso Gains Amid Dollar Weakness

Quick overview

The Mexican peso appreciated against the U.S. dollar on Monday, supported by a broad weakening of the greenback. This shift followed renewed tariff threats from U.S. President Donald Trump and his accusations against China.

The exchange rate closed the day at 19.1998 pesos per dollar, compared to 19.3957 the previous day, according to official data from the Bank of Mexico (Banxico). This represented a gain of 19.59 centavos for the peso, equivalent to an appreciation of 1.01%.

During the session, the dollar traded in a range between a high of 19.4348 and a low of 19.2015 pesos. The U.S. Dollar Index (DXY), which measures the dollar against a basket of six major currencies, fell 0.65% to 98.68 points.

On Friday, Trump warned he would double tariffs on steel and aluminum imports to 50%, just hours after accusing China of violating an agreement to mutually reduce tariffs and trade restrictions on critical minerals.

Mexican Economy Data

The peso began the month gaining ground and testing the 19.20 support level amid dollar weakness. Brokerage firms noted that the dollar could fall to levels not seen since the pandemic, potentially reaching the 19 peso mark.

Domestically, investors were also digesting the results of Mexico’s first-ever judicial elections—a process that had caused uncertainty since being proposed by the previous administration. Vote counting results are now awaited.

In addition, the Bank of Mexico’s latest survey of private-sector analysts showed an increase in expectations for interest rate cuts by year-end. The forecasted rate now stands at 7.50%, down from the previous 7.75%, implying a potential 100 basis point reduction.

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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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