Background on the Mexican Peso and Its Recent Performance
The Mexican peso has experienced a marginal appreciation against the US dollar, reaching its best level since August 2024. This improvement comes as global markets seem to have moved past geopolitical tensions in the Middle East, while concerns about US tariff discussions resurface.
Weekly Performance
- The Mexican peso closed the week at 18.8529 pesos per dollar, marking a slight 0.05% increase compared to the previous day’s close of 18.8623 pesos, according to official data from Banco de México (Banxico).
- On a weekly basis, the national currency appreciated by 1.65%, its best performance since the week ending April 25, when it appreciated by 2.20%.
- On a monthly basis, the peso is on track for a 2.80% appreciation, which would mark its sixth consecutive month of gains against the dollar.
Global Currency Performance
The Intercontinental Exchange’s Dollar Index (DXY), which compares the US dollar to six reference currencies, fell 1.27% to 97.03 points during the week.
- Among major currency pairs, the shekel (Israel), húngaro florín (Hungary), Swiss franc, Polish zloty, Czech koruna, and British pound were the most appreciated currencies in the week with gains of 2.73%, 2.54%, 2.27%, 2.24%, 2.00%, and 1.96% respectively.
- The euro closed the week with a 1.67% gain, trading at 1.1716 dollars per euro.
- The peso (Argentina), Turkish lira, Russian ruble, and Colombian peso were the only depreciating currencies in the week with losses of 2.06%, 0.53%, 0.19%, and 0.07% respectively.
Expert Analysis and Market Speculation
Felipe Mendoza, a financial markets analyst at ATFX LATAM, stated: “With this, the Mexican currency has reached levels not seen since August 2024, mainly backed by the prolonged weakness of the US dollar, which continues to lose traction in global markets and the recent 50 basis points interest rate cut by the Bank of Mexico, leaving it at 8%.”
Mendoza further explained: “The Mexican peso closed the week strong, in an environment where local stability and expectations of disinflation continue to attract capital. However, volatility might increase if the international environment adjusts following US inflation surprises and global monetary policy evolution.”
Declining Speculative Bets on the Peso
For the third consecutive week, speculators have reduced their positions favoring the Mexican peso at the Chicago Mercantile Exchange (CME).
- Between June 18 and June 24, speculative net positions awaiting peso appreciation decreased by 11.57% or 6,716 contracts, totaling 51,311 contracts.
- This marks the third week in a row with declining positions, accumulating a decrease of 20.39% or 13,138 contracts.
- At exchange rates below 19.00 pesos per dollar, the appeal of maintaining speculative positions in favor of the peso is diminishing.
Key Questions and Answers
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Q: What is the current status of the Mexican peso?
A: The Mexican peso has appreciated to its best level since August 2024, supported mainly by the persistently weak US dollar and a recent 50 basis points interest rate reduction by the Bank of Mexico.
Q: How have global currencies performed recently?
A: The US dollar weakened against a basket of major currencies, with the shekel (Israel), húngaro florín (Hungary), Swiss franc, Polish zloty, Czech koruna, and British pound showing significant gains. The euro also appreciated against the dollar, while the Argentine peso, Turkish lira, Russian ruble, and Colombian peso depreciated.
Q: What are market speculators’ positions on the Mexican peso?
A: Speculators have reduced their bets on the Mexican peso for three consecutive weeks, with net positions awaiting appreciation decreasing by 11.57% or 6,716 contracts during the week of June 18-24.
