Seven Consecutive Days of Gains for the Mexican Peso
The Mexican peso appreciated against the US dollar for the seventh consecutive day, supported by a weakening greenback and market assimilation of the approval of President Donald Trump’s fiscal and spending package.
Market Performance
The exchange rate touched an unseen minimum since August 20th, closing at 18.7307 pesos per dollar, according to official data from Mexico’s central bank (Banxico). This represents a 3.47-centavo or 0.19% gain for the peso compared to yesterday’s record of 18.7654 pesos.
The dollar’s price ranged from a high of 18.8252 pesos to a low of 18.6619 pesos. The Intercontinental Exchange’s Dollar Index (DXY), which compares the US dollar to a basket of six currencies, fell 0.13% to 96.65 points.
“We expect the recovery to continue after breaking through resistance located at 18.70,” stated Grupo Financiero Banorte in a note. “The next technical support level is at 18.55, while resistance lies at 18.80. We suggest maintaining positions.”
US Approves Spending Package
The US Senate approved President Trump’s tax-cut and spending bill, known as “One Big Beautiful Bill“. The $3.3 trillion package will add to the US debt, and it returns to the House of Representatives.
In this context, the peso extended its seven-day winning streak against a closing official rate of 19.1683 on June 20th, accumulating a gain of 43.76 centavos or 2.28%. The peso reached its best session level, an unseen minimum since August 20th.
The Fed’s Wait and See Approach
Market operations were also influenced by comments from Federal Reserve President Jerome Powell, who reiterated that the central bank plans to “wait and see” the impact of tariffs on inflation before cutting interest rates.
“We’re just taking some time,” Powell said at a meeting of central bankers in Portugal, following Trump’s handwritten letter suggesting other central banks had cut rates and urging action in the US.
Analysts Predict 7% Devaluation
In Mexico, Banxico’s survey of private sector analysts stood out. Experts anticipate a more than 7% devaluation of the peso from its current levels, ending the year at 20.13. This projection is better than the previous month’s forecast of 20.50.
Key Questions and Answers
- What is the current status of the Mexican peso against the US dollar? The Mexican peso has gained 43 centavos against the dollar in a seven-day winning streak, supported by a weakening US dollar and the approval of President Trump’s fiscal and spending package.
- What is the US spending package’s impact on the Mexican peso? The $3.3 trillion US spending package, approved by the Senate, has contributed to the Mexican peso’s appreciation against the dollar.
- How is the Federal Reserve approaching interest rate adjustments? The Fed, under President Jerome Powell, plans to observe the impact of tariffs on inflation before making any interest rate adjustments.
- What do analysts predict for the Mexican peso’s value by year-end? Analysts surveyed by Banxico expect the Mexican peso to devaluate by more than 7% from its current levels, finishing the year at 20.13.
