The wind is blowing in favor of the Mexican peso in the last mile of the year. The exchange rate stood at the beginning of this Wednesday at 17.90 units per dollar, which represents an appreciation of 0.05% of the national currency against the American currency and its best level since July 2024. On the eve of the Christmas holidays, the Mexican currency is the tenth currency with the most gains against the dollar among the 16 main currencies examined by the Bloomberg agency. Analysts from Grupo Financiero Monex pointed out that the peso is moving in a narrow range due to the low volume of operations due to the multiple global holidays, but also favored by the weakness of the dollar which, on the other hand, has been falling for three sessions.
Although at midday the peso had limited its advance and was trading around 17.92 units per dollar in the spot market, forecasts suggest that the strength of the Mexican currency will continue. “Given the current trend, we expect that the peso parity against the dollar will remain in the fluctuation range between 17.90 and 17.94 pesos per dollar towards the close of the session. Taking into account the stability of the dollar, tomorrow’s holidays and the little data on the economic agenda for Friday”, indicates Monex in its analysis.
Regarding the weakness of the dollar, Gabriela Siller, director of analysis at Banco Base, specifies that this currency is trading down due, mainly, to liquidity injections from the Federal Reserve. “Last week, the Fed injected a total of $30 billion, with the aim of ensuring the functioning of monetary policy. This started with the Fed’s monetary policy decision on December 10, and since then the dollar has fallen by 120%,” it said. According to the analyst, these liquidity injections have weakened the dollar and, therefore, the Mexican peso is expected to continue to appreciate with the possibility of reaching 17.65 units per dollar in the first quarter of 2026.
Another factor that boosted the Mexican currency this week was the slowdown in inflation in Mexico during the first week of December, reaching 3.72%, lower than market expectations. This data reinforced expectations that the Bank of Mexico could suspend its cycle of interest rate cuts, which stands at 7%. Thus, the Mexican peso is expected to close this year with a “golden pin”, a contrasting close after the depreciation recorded at the beginning of 2025 due to the imposition of customs duties by the United States government. Monex explains that the national currency was favored by the decline of the dollar and the resolution of trade tensions between Mexico and the United States.
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