Mexican Peso Weakens After Hitting Its Best Level of the Year
During the session, the dollar traded in a range between a high of 17.3463 pesos and a low of 17.1117, a level not seen since June 2024.
Quick overview
- The Mexican peso weakened against the U.S. dollar after reaching its strongest level of the year.
- The exchange rate closed at 17.2333 pesos per dollar, reflecting a slight loss from the previous day.
- Traders are anticipating the release of Mexico's GDP data, which is expected to show a rebound.
- Analysts believe the peso may continue to appreciate if it breaks below the resistance level of 17.10.
The peso pulled back after earlier hitting its strongest level of the year, as traders positioned themselves ahead of key data releases.
The Mexican peso weakened against the U.S. dollar in Thursday’s session. The local currency retreated after touching its best level so far this year earlier in the day, as market participants brace for the release of Mexico’s GDP data scheduled for Friday.
The exchange rate closed at 17.2333 pesos per dollar. Compared with Wednesday’s close of 17.2178, according to official data from the Bank of Mexico (Banxico), the move represented a loss of 1.55 centavos, or 0.09%.
During the session, the dollar traded in a range between a high of 17.3463 pesos and a low of 17.1117, a level not seen since June 2024. Meanwhile, the U.S. Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, fell 0.19% to 96.17.
Targeting the 17.00 level
The peso extended its gains against the dollar during overnight trading but later faced resistance near the 17.20 level. Despite the pullback, analysts continue to see room for further appreciation amid ongoing weakness in the U.S. currency.
“We expect the recovery bias to remain in place. A break below the resistance at 17.10 would reinforce the peso’s appreciation. In that case, the next key technical level would be 17.00,” analysts said.
Focus on GDP and USMCA
After several days in which attention centered on the Federal Reserve’s policy decision, local FX traders are now turning to the preliminary release of Mexico’s gross domestic product (GDP). A rebound is expected in the final quarter of 2025.
Markets are also preparing for renewed discussions over the review of the USMCA trade agreement, after Economy Minister Marcelo Ebrard and U.S. Trade Representative Jamieson Greer agreed on Wednesday to push forward structural reforms to the pact.
Overall, the peso’s strength against the dollar is expected to persist. China’s willingness to deepen trade ties with U.S. neighbors is seen as a key factor in upcoming USMCA negotiations.
On the data front, the number of Americans filing initial jobless claims fell modestly last week, signaling continued labor market resilience. Claims declined by 1,000 to 209,000.
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