Mexican Peso Hits Year’s High, Nears 18 per Dollar
The U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, slipped 0.35% to 98.30.
Quick overview
- The peso strengthened against the U.S. dollar, reaching its strongest level in 17 months after the Federal Reserve's interest-rate cut.
- The exchange rate closed at 18.0354 pesos per dollar, marking an appreciation of 0.81%.
- The Fed's recent rate cut was its third in a row, with projections indicating potential future cuts in 2026 and 2027.
- Banxico's Governor mentioned that a rate cut will be considered in the upcoming policy meeting due to rising risks to growth and inflation.
The peso strengthened on Thursday as the U.S. dollar weakened, one day after the Federal Reserve announced a widely expected interest-rate cut.
The Mexican currency gained ground in Thursday’s session, reaching its strongest level in 17 months following the Fed’s rate adjustment and the subsequent pullback in the greenback.
The exchange rate closed at 18.0354 pesos per dollar, compared with 18.1824 units on Wednesday, according to official data from the Bank of Mexico (Banxico). The move represented an appreciation of 14.7 centavos, or 0.81%.
During the day, the dollar traded between a high of 18.2236 pesos and a low of 18.0106. The U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, slipped 0.35% to 98.30.
The Fed on Wednesday delivered a widely anticipated 25-basis-point rate cut—its third in a row—bringing the benchmark range to 3.50%–3.75%. In his press conference, Fed Chair Jerome Powell signaled that rate reductions could pause in early 2026. The central bank’s latest projections point to one additional 25-bp cut in 2026 and another in 2027, with minimal changes to inflation and unemployment forecasts.
Markets, however, are still digesting Powell’s dovish tone and the Fed’s decision to buy short-term Treasuries. Investors now expect roughly 55 basis points of easing in 2026—well above the Fed’s projection of just one cut.
In Mexico, Banxico Governor Victoria Rodríguez said she and other board members will consider a rate cut at next Thursday’s policy meeting, noting rising risks to both growth and inflation.
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