Background on the Mexican Peso and its Recent Performance
The Mexican peso strengthened against the dollar in Monday’s trading sessions. The local currency gained ground amidst a market anticipating inflation data from Mexico and the United States later in the week, as well as the unveiling of the 2026 Economic Package.
The exchange rate concluded the day at 18.6587 units per dollar, marking an increase from Friday’s close of 18.7143 pesos according to official data from the Bank of Mexico (Banxico). This translates to a gain of 5.56 centavos, or 0.30%, compared to the previous day.
The dollar’s trading range was between a high of 18.7386 units and a low of 18.6220. The Dollar Index (DXY) from the Intercontinental Exchange, which compares the US dollar to six major currencies, fell 0.32% to 97.46 units.
Expert Analysis on the Peso’s Performance
Juan Carlos Cruz, founder of México Financiero, explained: “The peso begins the week positively, highly correlated with dollar movements and once again oscillating just above its 50-day moving average (18.70). I do not rule out testing the immediate support level at 18.60.”
Weakening Dollar Amidst Fed Speculation
The dollar continued to lose ground in the market due to speculation that the Federal Reserve (Fed) will start cutting its rate at the upcoming meeting, which is next week. However, recent employment figures showing weakness in the job market strengthened expectations for a prolonged rate cycle.
The FedWatch tool from CME Group, which tracks futures on the federal funds rate, projects an 88.4% probability of a 25-basis-point adjustment next week, while the market anticipates another one in October with a 75.6% probability.
With no significant economic data, the peso slightly advanced but remained within a recent range, awaiting data that could clarify the market’s outlook on the Fed’s interest rates, particularly the US Consumer Price Index (CPI) on Thursday.
Anticipation of the 2026 Economic Package
Jacobo Rodríguez, an expert at Roga Capital, commented: “We could remain in a sideways market, though there are significant events like today’s budget package. It is expected that the government will maintain sound finances, which should be reflected in this economic package.”
The Secretariat of Finance is expected to present the 2026 Economic Package, which includes the tax income bill proposal, the expenditure budget proposal, and the government’s general economic policy criteria, to Congress later in the day.
Key Questions and Answers
- Q: What is the current status of the Mexican peso against the dollar?
- Q: What factors are influencing the peso’s performance?
- Q: How is the Federal Reserve impacting the dollar’s strength?
- Q: What is the significance of the 2026 Economic Package?
A: The Mexican peso gained ground against the weakening dollar, closing at 18.6587 units per dollar on Monday.
A: The peso is influenced by anticipation of inflation data from Mexico and the US, as well as the upcoming 2026 Economic Package.
A: Speculation that the Fed will soon cut interest rates has led to a weakening dollar, despite recent weak employment figures suggesting a prolonged rate cycle.
A: The 2026 Economic Package, to be presented by the Secretariat of Finance, contains crucial information on tax income and expenditure proposals, as well as the government’s economic policy criteria.
