Peso hits a year’s best against the dollar in a strong week for Mexico’s economy

The peso seems headed for a precise affirmative week aft rising to a yearly precocious successful overnight trading earlier halting its beforehand erstwhile the markets opened connected Friday.

Mexico’s currency appreciated against the U.S. dollar for a 5th consecutive day, hitting 18.43 to the dollar to people a caller year-to-date precocious and reaching levels not seen since July 26, 2024.

The peso gave backmost immoderate of its gains successful aboriginal trading connected Friday, slipping to 18.49 to the dollar, earlier strengthening aboriginal successful the aboriginal afternoon. Analysts astatine Banco Base attributed the greeting depreciation to a correction aft the peso appreciated during 5 consecutive sessions and gained 1.47% against the dollar.

According to planetary fiscal information institution Trading Economics, the peso strengthened “as the greenback remained subdued, driven by weaker US labour information and little Treasury yields, portion Mexico’s ain ostentation illustration remained contained.”

Mexico’s header ostentation slowed somewhat to 3.57% successful August, successful enactment with expectations, portion halfway ostentation held dependable astatine 4.23%. The information reinforced expectations that the cautious monetary easing rhythm being followed by Mexico’s cardinal slope (Banxico) volition proceed astatine a measured pace. 

In a societal media post, Gabriela Siller, manager of economical investigation astatine Grupo Financiero Base, attributed the peso’s renewed spot to investors’ optimism up of the upcoming U.S. Federal Reserve Board meeting. 

At dawn Friday, 1 of these 100 dollar bills would person outgo 1843 pesos, the champion woody since July 2024. (@FinestraMX/X)

In her post, Siller wrote that the caller yearly debased of 18.49 for the fig of pesos needed to bargain a dollar tin beryllium attributed to “the anticipation the Fed volition chopped its complaint connected Sept. 17.” 

At the aforesaid time, Banxico’s precocious upgraded maturation projections, boosting its 2025 GDP forecast to 0.6% and 2026 to 1.1%, signaled a content successful the resilience of the economy. 

Tracking the bullish inclination demonstrated by the peso, the Mexican Stock Exchange (Bolsa) deed caller historical highs this week.

The Bolsa, which has performed good this year, deed a grounds precocious of 61,886.12 connected Thursday, surpassing the erstwhile grounds of 61,522.63 points acceptable connected Wednesday, which successful crook surpassed the grounds acceptable lone 2 days earlier.

The Bolsa gained 3.02% past week and was up 23.57% astatine adjacent connected Thursday.

With reports from El Economista, El Universal, Infobae and El Financiero