Background on Key Figures and Context
The Mexican peso has been on an upward trajectory against the US dollar in 2026, with the local currency maintaining its positive trend. This is occurring as markets prepare for the first monetary policy decision of the year from the US Federal Reserve (Fed).
Market Performance and Dollar Weakness
On Tuesday, the Mexican peso extended its advance against the dollar. The local currency maintained its positive trend in 2026, as markets geared up for the Fed’s first policy decision of the year. According to official data from Banco de México (Banxico), the exchange rate closed at 17.2420 pesos per dollar, marking a gain of 12.78 centavos or 0.74% compared to the previous day’s high of 17.3698 pesos.
- The dollar’s movement ranged from a high of 17.3621 pesos to a low of 17.2017 pesos, un level not seen since early June 2024.
- The Dollar Index (DXY), which compares the dollar to six currencies, fell 1.34% to 95.76 units.
Historically Low Dollar Value
The dollar fell to its lowest value in four years on Tuesday, as markets prepared for the Fed’s first policy decision of 2026. Market expectations are that the monetary authority will keep its reference interest rate unchanged.
The dollar’s decline has been consistent throughout 2026 and late 2025 due to increased risk associated with the United States and the Trump administration’s trade strategy, aiming to reduce the world’s largest economy’s trade deficit.
Speculation about potential US and Japanese intervention to strengthen the yen is another factor influencing traders’ behavior. Meanwhile, the euro has strengthened to a level of 1.20 dollars per unit for the first time since 2021.
Mexico’s Trade Balance
In local news, traders were considering Mexico’s trade balance data, which reported a surplus of 771 million dollars in 2025 compared to a deficit of 18,540 million dollars in 2024, according to the INEGI report this morning.
“The growth in Mexican exports was driven by manufacturing sectors distinct from the automotive industry, accumulating an annual advance of 17.34%, the highest growth rate since 2021,” highlighted local Banco Base in a client note.
“Considering the current trend, we expect the exchange rate to remain within a fluctuation range of 17.22 to 17.25 pesos per dollar, with support levels at 17.19 and resistance at 17.30,” said Monex.
Key Questions and Answers
- Q: Who is the US Federal Reserve (Fed), and why is their policy decision important? A: The Fed is the central bank of the United States. Its policy decisions, such as interest rate adjustments, can significantly impact global financial markets, including the Mexican peso.
- Q: What factors contribute to the Mexican peso’s positive trend against the dollar? A: The peso’s strength is attributed to a weaker US dollar, Mexico’s trade surplus, and speculation about potential US and Japanese intervention to strengthen the yen.
- Q: How has Mexico’s trade balance evolved in recent years? A: Mexico transitioned from a trade deficit of 18,540 million dollars in 2024 to a surplus of 771 million dollars in 2025, driven by robust export growth in non-automotive manufacturing sectors.
