Mexican Peso Rises Against the Dollar After Banxico Rate Cut
The central bank’s Governing Board voted 4–1 in favor of the rate cut, bringing the benchmark interest rate to its lowest level in two years
Quick overview
- The Mexican peso appreciated against the U.S. dollar, closing at 18.5647 pesos per dollar after a 0.14% gain.
- The Bank of Mexico cut interest rates by 25 basis points to 7.25%, marking its twelfth consecutive reduction.
- Banxico's decision was influenced by slower economic activity and global trade tensions, which pose risks to growth.
- Analysts suggest that a sustained break below the 18.60 level could indicate a more favorable outlook for the peso.
The Mexican peso edged higher against the U.S. dollar on Thursday, in a session dominated by the Bank of Mexico’s (Banxico) monetary policy decision to cut interest rates—its twelfth consecutive adjustment—by 25 basis points to 7.25%, in line with market expectations.
The exchange rate closed at 18.5647 pesos per dollar, compared with 18.5904 in the previous session, marking a 0.14% gain for the local currency. The dollar traded between a high of 18.6585 and a low of 18.5582, while the U.S. Dollar Index (DXY) fell 0.44% to 99.73, reflecting a broader softening of the greenback as investors showed renewed appetite for risk.
Banxico’s Policy Move
The central bank’s Governing Board voted 4–1 in favor of the rate cut, bringing the benchmark interest rate to its lowest level in nearly two years. Banxico justified the move citing slower economic activity in the third quarter, mild peso depreciation, and ongoing global trade tensions, which it described as “significant downside risks” to growth.
From a technical standpoint, analysts noted that a sustained break below the 18.60 100-day moving average could signal a more favorable bias for the peso. The next key support is seen around 18.50, while resistance stands near 18.75.
Overall, the peso has maintained a gentle upward trend over the past month, trading within an ascending channel, though short-term pullbacks toward the 18.49–18.46 range remain possible.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save