Mexican Peso Advances, Posts 1.54% Weekly Gain
The exchange rate closed at 18.6014 pesos per dollar, compared with Thursday’s 18.6368, according to official data from the Bank of Mexico.
Quick overview
- The U.S. dollar weakened on Friday, leading to a decline in the exchange rate amid expectations of interest rate cuts in the U.S.
- The Mexican peso appreciated by more than 1.5% against the dollar, closing at 18.6014 pesos per dollar.
- Analysts predict two additional 25-basis-point cuts to the U.S. benchmark rate by mid-2026, which could further support the peso.
- The peso's strength is attributed to interest rate differentials and a slowdown in Banxico's easing pace.
The exchange rate fell on Friday as the U.S. dollar weakened amid expectations of interest rate cuts in the United States.
The Mexican peso edged higher against the dollar, supported by the softer greenback and growing bets on U.S. monetary easing. The currency ended the week with a cumulative gain of more than 1.5%.
The exchange rate closed at 18.6014 pesos per dollar, compared with Thursday’s 18.6368, according to official data from the Bank of Mexico (Banxico). This represents an appreciation of 3.54 centavos, or 0.19%.
The dollar traded between a high of 18.6373 and a low of 18.5465. The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.18% to 98.27.
Fed Rates
U.S. President Donald Trump nominated Stephen Miran, Chairman of the Council of Economic Advisers, to serve as a Federal Reserve governor following Adriana Kugler’s departure. The move has heightened expectations of a more accommodative monetary policy and rate adjustments.
A potential U.S. rate-cut cycle supports the peso’s appeal through interest rate differentials—especially after Banxico slowed its own easing pace on Thursday, delivering a 25-basis-point cut following four consecutive 50-basis-point reductions.
Analysts forecast two additional 25-basis-point cuts to a 7.25% benchmark rate by the first half of 2026, contingent on continued declines in core inflation. Under this scenario, the peso-dollar rate could range between 18.40 and 18.95, possibly testing 18.35.
For the week, amid bets on U.S. rate cuts following weak economic data and the lack of inflationary pressures from tariffs, the peso strengthened by 28.72 centavos, or 1.54%, from last Friday’s 18.8886.
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