Global Dollar Advance Affects Mexican Peso
The Mexican peso is currently experiencing a slight decline against the US dollar. This retreat comes as a result of an overall strengthening of the dollar following President Donald Trump’s decision to choose Kevin Warsh, former Fed governor, as the next head of the US central bank.
The spot exchange rate stands at 17.2610 pesos per dollar, marking a gain of 2.77 centavos or 0.16% compared to the previous day’s official Banco de México (Banxico) data of 17.2333 pesos per dollar.
The dollar’s price is fluctuating between a high of 17.3485 pesos and a low of 17.2184 pesos, while the Intercontinental Exchange’s Dollar Index (DXY)—which measures the dollar against a basket of six reference currencies—increased by 0.51% to reach 96.65 points.
“Today, the Mexican peso remains under pressure due to the dollar’s correction and a robust economic agenda. Support levels are at 17.10, while resistance is at 17.40 in the interbank market,” explained Monex in a report.
Next Fed President Nomination
After months of uncertainty regarding who would replace Jerome Powell as Fed chair when his term ends in May, Donald Trump announced that he has chosen Kevin Warsh. Warsh’s nomination still needs confirmation from the US Senate.
“Markets began the session with losses following Donald Trump’s announcement of Kevin Warsh as the new Fed president, a profile perceived as more hawkish than other candidates, raising expectations of fewer rate cuts,” stated GBM in a note.
Robust Economic Agenda
The session is also marked by the release of US inflation figures, which showed a faster-than-expected rise in producer prices in December. These numbers suggest that consumer price pressure might rebound.
On the local front, it was reported that Mexico’s Gross Domestic Product (GDP) increased by 0.8% in the fourth quarter, with preliminary seasonally adjusted figures from INEGI showing an annual growth rate of 1.6% in original terms.
“We anticipate that economic activity will continue to recover in 2026, albeit at a moderate pace, with a growth rate of 1.6%. This would mark three consecutive years below the 2000-2018 average of 1.9%,” highlighted Banamex.
Week and Month Closing Outlook
Despite the dollar’s upward movement, the peso is on track to close the week and month with gains. Last Friday’s closing rate was 17.3677 pesos per dollar, and the year began at an exchange rate of 18.0080 pesos per dollar.
Key Questions and Answers
- What is causing the Mexican peso to retreat? The global strengthening of the US dollar, following President Donald Trump’s nomination of Kevin Warsh as the next Fed president, is putting downward pressure on the Mexican peso.
- Who is Kevin Warsh and why is his nomination significant? Kevin Warsh is a former governor of the Federal Reserve. His nomination as the next Fed president by President Trump has raised expectations of fewer rate cuts due to his perceived more hawkish stance compared to other candidates.
- What are the recent economic developments affecting the Mexican peso? The US released inflation data showing a faster-than-expected rise in producer prices, hinting at potential consumer price pressure rebound. Meanwhile, Mexico’s GDP grew by 0.8% in the fourth quarter at an annual rate of 1.6%.
- How is the Mexican peso expected to perform in the near future? Despite short-term fluctuations, the Mexican peso is anticipated to close the week and month with gains, following a solid start to 2026.
