Quick overview

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The exchange rate briefly touched 18.82 pesos per dollar during mid-session trading—a level not seen since last August, when Donald Trump threatened to halt trade with Mexico unless it curbed drug trafficking and illegal immigration.

The Mexican peso strengthened against the U.S. dollar in Wednesday’s trading session, bolstered by a lower-than-expected U.S. inflation report and news of a preliminary trade agreement between Beijing and Washington.

The exchange rate closed the day at 18.9224 pesos per dollar, according to official data from the Bank of Mexico (Banxico), improving from Tuesday’s 19.0668. This represents a gain of 14.44 centavos, or 0.75%.

During the session, the dollar traded in a wide range, with a high of 19.0701 and a low of 18.8263 pesos. The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, fell 0.39% to 98.65.

U.S. Data and Trade Optimism

The U.S. Consumer Price Index (CPI) rose just 0.1% in May—lower than the 0.2% forecast by analysts. Core CPI, which excludes food and energy, also increased by 0.1%, below the expected 0.3%.

The subdued inflation figures suggest that the Federal Reserve’s monetary policy is having its intended effect, reinforcing expectations of rate cuts later this year. This marks the fourth consecutive report showing monthly inflation at or below 0.2%.

In addition, the U.S. and China reached a preliminary agreement on a “general framework” to ease trade tensions. The deal still requires final approval from President Donald Trump and Chinese President Xi Jinping.

Is the ‘Super Peso’ Back?

The peso’s rally earlier in the day sparked renewed discussion around the idea of the “super peso.” At her morning press conference, President Claudia Sheinbaum celebrated the currency’s recent strength.

Locally, the peso was also supported by stronger-than-expected Mexican industrial activity data. Output rose 0.1% in April, defying forecasts of a second consecutive monthly decline. On an annual basis, however, industrial activity contracted by 4%.

The peso decisively broke below the 19-mark, trading as low as 18.82, amid a weakening dollar driven by easing U.S. inflation and positive developments on the global trade front. The last time the exchange rate touched these levels was August 20 of last year—shortly after then-presidential candidate Donald Trump threatened to sever U.S.-Mexico trade relations over concerns about drug trafficking and illegal immigration.