Mexican Peso Surges to Best Level of 2025 Against the Dollar
The new yearly low in the exchange rate is driven by expectations that the Federal Reserve will cut interest rates on September 17.
Quick overview
- The Mexican peso appreciated against the U.S. dollar for the fifth consecutive day, reaching levels not seen since July 26, 2024.
- The exchange rate closed at 18.4828 pesos per dollar, marking a 0.58% appreciation compared to the previous day.
- Expectations of a potential interest rate cut by the Federal Reserve contributed to the peso's gains and a decline in the U.S. Dollar Index.
- Mexican stock markets also performed well, with both major indices hitting new all-time highs amid positive macroeconomic signals.
The Mexican peso appreciated against the U.S. dollar for the fifth consecutive day, marking a new yearly low and reaching levels not seen since July 26, 2024. At the close of trading on Thursday, the peso continued its upward trajectory following the release of macroeconomic data from the United States and Mexico.
According to official data from the Bank of Mexico (Banxico), the exchange rate ended the session at 18.4828 pesos per U.S. dollar, representing an appreciation of 10.80 cents, or 0.58%, compared with the previous day’s close.
This marks the peso’s fifth consecutive day of gains, achieving levels not seen since it hit 18.4427 pesos per dollar on July 26, 2024. Meanwhile, the U.S. Dollar Index (DXY), which tracks the greenback against a basket of six currencies, fell 0.26% to 97.52 points.
The new yearly low in the exchange rate is driven by expectations that the Federal Reserve will cut interest rates on September 17, with speculation that the reduction could reach 50 basis points. In the U.S., inflation data that came in line with expectations reinforced the outlook for a rate-cut cycle.
Additionally, another report showed that weekly jobless claims increased last week, highlighting a weakening in labor market conditions. According to the CME Group FedWatch tool, the market assigns a 92.8% probability of a 25-basis-point rate cut at the Fed’s upcoming meeting.
Domestically, industrial production figures came in much weaker than expected, though they had little impact on financial market performance. Mexican stock markets advanced on Thursday, with both major indices reaching new all-time highs following the release of U.S. inflation and employment data.
Mexican Stock Market Performance
The S&P/BMV IPC, the benchmark index of the Mexican Stock Exchange (BMV) which tracks the most actively traded local stocks, rose 1.76% to 61,553.58 points, marking another record closing. During the session, it reached an intraday high of 61,886.12 points. Similarly, the FTSE BIVA index of the Institutional Stock Exchange (BIVA) gained 1.72% to 1,230.47 points, hitting an intraday peak of 1,238.10 points.
So far in September, the S&P/BMV IPC has gained 4.85%, while the FTSE BIVA has risen 4.68%, reflecting sustained optimism in Mexican equities amid supportive macroeconomic signals both domestically and in the United States.
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