Mexican Peso Eases Against the Dollar in a Quiet Trading Session
Mexico’s Global Indicator of Economic Activity (IGAE) showed a 0.6% monthly increase in August, according to data released by INEGI.
Quick overview
- The Mexican peso weakened slightly against the U.S. dollar, closing at 18.4479 pesos per dollar.
- Mexico's Global Indicator of Economic Activity showed a 0.6% monthly increase in August, but a 0.9% year-over-year decline indicates economic challenges.
- The U.S. government shutdown, now in its third week, is causing uncertainty in the markets as investors await key economic data.
- Analysts expect potential movement in the peso next week as it remains within a defined trading range.
The Mexican peso edged lower against the U.S. dollar in midweek trading, as investors weighed local economic data and ongoing concerns about the U.S. government shutdown, now entering its third week.
The exchange rate closed at 18.4479 pesos per dollar, compared with 18.4397 on Tuesday, according to official data from the Bank of Mexico (Banxico). The 0.05% decline—less than one cent—marks a slight weakening for the local currency.
During the session, the dollar traded between a high of 18.4706 and a low of 18.3689 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, slipped 0.06% to 98.91 points.
IGAE Data
Mexico’s Global Indicator of Economic Activity (IGAE) showed a 0.6% monthly increase in August, according to data released by INEGI earlier in the day. However, activity fell 0.9% year over year, signaling a weak performance for GDP in the third quarter, with preliminary figures due next week.
Although August’s growth was slightly stronger than analysts expected, the annual decline suggests continued headwinds for the Mexican economy.
Three Weeks into the U.S. Shutdown
In the United States, President Donald Trump on Tuesday rejected a request from top Democratic lawmakers to meet until the government shutdown—now in its third week—comes to an end.
The prolonged closure has led to federal employee furloughs and a suspension of several key economic indicators, leaving markets “flying blind” on the outlook for monetary policy. Investors are now awaiting Friday’s U.S. inflation data for fresh direction.
Slow Technical Action
Analysts noted that the peso remains confined within its weekly range, trading with low volatility and sideways momentum amid a lack of fresh catalysts. However, more movement could emerge next week as a 90-day extension on the implementation of U.S. tariffs on Mexico—announced on July 31—comes due.
The peso continues to hold key technical levels, with support near 18.30 per dollar and resistance around 18.50. As long as it remains within this band, analysts see room for potential strengthening toward the lower end of the range.
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