Mexican Peso Rises Ahead of U.S. Jobs and Inflation Reports
According to the CME FedWatch tool, which tracks federal funds futures, traders assign an 89.2% probability to a 25 bps rate cut.
Quick overview
- The Mexican peso gained slightly against the dollar, closing at 18.2826 pesos per dollar amid expectations of a Federal Reserve rate cut next week.
- Investors are awaiting key U.S. inflation and labor market data, which will influence the Fed's policy decision scheduled for December 10.
- The OECD forecasts 0.7% growth for Mexico in 2025, slightly above private-sector estimates, while warning of potential challenges in 2026 due to a complicated trade environment.
- The exchange rate is expected to fluctuate between 18.22 and 18.33 pesos in the coming days, with a slight appreciation bias if the dollar remains stable.
The peso strengthened in a market still betting on a Federal Reserve rate cut next week, while awaiting key indicators.
The Mexican peso posted a slight gain against the dollar in the second trading session of the week. The local currency advanced as investors continued to price in a rate cut by the Federal Reserve (Fed) next week and awaited key data releases.
The exchange rate closed the day at 18.2826 pesos per dollar, compared with 18.3103 yesterday, according to official data from the Bank of Mexico (Banxico). The move represented an appreciation of 2.77 centavos, or 0.15%.
The dollar traded between a high of 18.3285 and a low of 18.2788 pesos. The Dollar Index (DXY)—which tracks the greenback against six major currencies—fell 0.04% to 99.37.
Key catalysts
Markets are awaiting U.S. inflation and labor market data this week, which will be crucial for assessing the strength of the world’s largest economy. These indicators will also be key references for the Fed’s final policy decision of the year, scheduled for December 10.
According to the CME FedWatch tool, which tracks federal funds futures, traders assign an 89.2% probability to a 25 bps rate cut—what would be the third consecutive reduction. However, the outlook for January remains uncertain.
Growth warnings
The market also digested a warning from the OECD, which said global growth should hold up in 2025 thanks to the rise of artificial intelligence, but a complicated trade environment could make 2026 more challenging.
For Mexico, the organization forecasts 0.7% growth in 2025, slightly above the 0.5% projection from private-sector analysts surveyed by Banxico. The OECD also expects growth of 1.2% in 2026 and 1.7% in 2027, according to its latest outlook report.
In the coming days, the exchange rate is expected to trade between 18.22 and 18.33, with a slight appreciation bias if the global dollar remains stable and speculative positioning continues to favor the peso.
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