Overview of the Mexican Peso’s Performance
The Mexican peso concluded the first day of this week slightly weaker against the US dollar, having reached a new yearly low. The local currency retreated marginally after hitting its lowest point for the year, as markets prepared for the first announcement from the Federal Reserve in 2026.
Closing Exchange Rate and Dollar’s Performance
The exchange rate ended the day at 17.3698 pesos per dollar, according to official data from Banco de México (Banxico). This represents a marginal loss of 0.01%, less than a cent, compared to the previous day’s closing rate of 17.3677 pesos.
The dollar’s price fluctuated within a range, with a high of 17.3991 pesos and a low of 17.2472 pesos, the latter not seen since June 2024. The Dollar Index (DXY), which measures the dollar against six reference currencies, fell by 0.58% to a level of 97.03 points.
Dollar Weakness Drives Peso Gains
The peso has been at yearly lows due to the dollar’s weakening against developed currency peers. The greenback hit its lowest levels since September, as markets absorbed speculation about intervention to boost the yen against the dollar.
Traders reduced their dollar positions ahead of the Federal Reserve meeting, scheduled for Wednesday, and potential announcements from US President Donald Trump’s government regarding a new head for the monetary authority.
Market expectations are that the central bank will keep interest rates steady, with a 97.2% probability according to the FedWatch tool that monitors futures markets. Focus will be on Jerome Powell’s speech and the accompanying statement.
“The exchange rate began this week at a new yearly low, unseen since early June 2024. The dollar price tested a significant support level at 17.25, which was immediately rejected,” said Juan Carlos Cruz Tapia, CEO of México Financiero.
The currency trader emphasized that the session reinforced the narrative that has weakened the dollar over recent months, bolstering rallies in metals and emerging market currencies. “I don’t rule out further dollar depreciation that could break through the 17.25 level and take it down to 17.”
Local Data Releases
In local news, the National Institute of Statistics and Geography (INEGI) released results from the National Occupation and Employment Survey, where the seasonally adjusted unemployment rate for December stood at 2.6%, and the unadjusted rate was 2.4%.
Key Questions and Answers
- What is the current status of the Mexican peso against the US dollar? The Mexican peso concluded the first day of this week slightly weaker against the US dollar, having reached a new yearly low.
- Why is the Mexican peso performing well? The peso has been at yearly lows due to the dollar’s weakening against developed currency peers.
- What are market expectations for the Federal Reserve’s announcement? Market expectations are that the central bank will keep interest rates steady.
- What recent local data was released by INEGI? INEGI published the National Occupation and Employment Survey results, with a seasonally adjusted unemployment rate of 2.6% for December and an unadjusted rate of 2.4%.
