Quick overview

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The Mexican peso weakened slightly against the U.S. dollar in Friday’s session amid heightened risk aversion following Israel’s large-scale airstrikes on Iran, which sharply escalated geopolitical tensions in the Middle East.

The spot exchange rate closed at 18.9396 pesos per dollar, according to Banxico. This marks a 0.10% decline, or 1.86 centavos, compared to Thursday’s official close of 18.9210.

The dollar traded in a wide range during the session, peaking at 19.1029 and bottoming at 18.8751. Meanwhile, the U.S. Dollar Index (DXY) — which measures the greenback against a basket of major currencies — rose 0.27% to 98.13.

Flight to Safety

Israel launched preemptive strikes on Iran early Friday, targeting nuclear facilities, ballistic missile factories, and military command centers as part of a broader operation to prevent Tehran from developing a nuclear weapon.

The escalation triggered a broad flight to safe-haven assets. The dollar gained sharply across global currencies, briefly touching 19.10 pesos. Gold surged 1.34% to $3,432.36 per troy ounce, while West Texas Intermediate (WTI) crude oil soared 6.32% to $71.85 per barrel, fueled by supply disruption fears.

Earlier in the day, the peso had fallen as much as 1.15% before paring losses into the close, as investors sought shelter amid uncertainty.

Weekly Gain Despite Geopolitical Shock

Despite Friday’s decline, the peso closed the week with a solid gain. From last Friday’s official close of 19.1054, the currency appreciated 16.58 centavos, or 0.87%.

The peso’s performance stood out as it not only broke below the key 19-per-dollar psychological barrier for the first time since August, but also briefly traded near 18.80 during the week.

This strength was driven by positive trade news and supportive economic indicators — particularly optimism surrounding the U.S.–China trade agreement announced earlier in the week.

Looking Ahead: Fed and Geopolitics in Focus

In the coming week, markets will remain focused on the escalating conflict between Israel and Iran and its potential impact on oil prices and global investor sentiment.

Additionally, investors will closely watch the U.S. Federal Reserve’s monetary policy decision on Wednesday, which could further influence currency and risk-asset dynamics.