Mexican Peso Extends Gains Against the Dollar for a Second Straight Day
The U.S. Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, slipped 0.18% to 97.43 points.
Quick overview
- The Mexican peso strengthened against the dollar for the second consecutive session amid a partial U.S. government shutdown.
- The exchange rate ended at 17.2599 pesos per dollar, gaining 0.76% from the previous session.
- Analysts expect the peso's recovery to continue, with support levels around 17.28.
- Traders are anticipating Banxico's monetary policy decision, expected to maintain current interest rates in the first quarter.
The Latin American currency advanced in a market focused on the partial shutdown of the U.S. government, which has suspended the release of key labor data closely watched by the Federal Reserve.
The Mexican peso strengthened against the dollar for a second consecutive session on Tuesday. The local currency gained ground as investors monitored developments surrounding the partial shutdown of the U.S. government, which has delayed the publication of labor market indicators critical for the Fed’s policy decisions.
The exchange rate ended the session at 17.2599 pesos per dollar. Compared with Monday’s LSEG reference price of 17.3927—there was no official Banco de México (Banxico) fixing due to a local holiday—the peso posted a gain of 13.28 centavos, or 0.76%.
The dollar traded within a range of a high of 17.4096 pesos and a low of 17.2062. The U.S. Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, slipped 0.18% to 97.43 points.
Analysts expect the peso’s recovery to continue after failing to break above resistance at 17.45. The next support level that could come into play is seen around 17.28. They recommend maintaining current positions.
Fed Lacks Key Data
The U.S. House of Representatives made progress on a spending bill aimed at ending the partial government shutdown. The legislation would fund federal agencies through October, but Democrats have sought to block it amid negotiations over immigration policy.
This week’s economic calendar features key U.S. labor market reports, including nonfarm payrolls and the unemployment rate—both crucial for shaping monetary policy expectations. However, the JOLTS job openings report scheduled for Tuesday was postponed.
After the Metals Rout
Precious metals plunged on Friday following news that Kevin Warsh, a former Federal Reserve governor, had been nominated as the preferred candidate to lead the central bank once Chair Jerome Powell’s term ends in May.
Markets are looking for clues on the future path of U.S. interest rates, amid expectations that rate cuts could proceed at a slower pace this year. Futures markets tracked by CME’s FedWatch tool currently price in two rate cuts for 2026.
Fed Governor Stephen Miran said in an interview with Fox Business Network that he continues to advocate for aggressive rate cuts. Meanwhile, Richmond Fed President Thomas Barkin noted that earlier cuts have contributed to a healthier labor market.
Focus Shifts to Banxico
On the domestic front, traders are bracing for Banxico’s first monetary policy decision of the year. The central bank is expected to keep interest rates unchanged in the first quarter, although its previous statement left the door open for potential adjustments later on.
Separately, the government announced a 2026–2030 infrastructure investment plan totaling 5.6 trillion pesos, to be carried out through public-private partnerships. The investment will target eight strategic sectors, including energy, railways, and ports.
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