Puerto Vallarta, Mexico – The Mexican peso is depreciating on Friday morning, extending a week of losses following the confirmation that the country’s Gross Domestic Product (GDP) contracted in the last quarter of 2024. The economic slowdown, coupled with global currency fluctuations, has put additional pressure on the local currency.
As of the latest data, the spot exchange rate stands at 20.3324 pesos per dollar, reflecting a decline of 1.95 cents from Thursday’s official closing price of 20.3129 as reported by the Bank of Mexico (Banxico). This represents a 0.10% depreciation for the peso against the greenback.
Peso Under Pressure
The peso is currently trading in a range between a high of 20.3633 pesos and a low of 20.2998 pesos. Meanwhile, the Dollar Index (DXY), which measures the performance of the U.S. dollar against a basket of six major world currencies, has risen 0.23% to 106.60 points, signaling a stronger dollar and contributing to the peso’s decline.
The weakness of the Mexican currency is linked to new economic data released by the National Institute of Statistics and Geography (Inegi). On Friday, Inegi reported that Mexico’s GDP contracted by 0.6% in the fourth quarter of 2024 with seasonally adjusted figures, confirming a slowdown in the economy. For the entire year, the economy expanded by only 1.20%, largely impacted by a decline in agricultural activities and sluggish industrial output.
Economic Analysis
“The detailed GDP report confirms what the monthly activity data suggested: the weakness of agriculture and industry offset the modest positive performance of services,” stated a report from consultancy firm Pantheon Macroeconomics.
Market analysts and economists have noted that this downturn reinforces concerns over Mexico’s economic momentum. The latest figures support Banxico’s recent warnings about weaker economic dynamism, which could have implications for future monetary policy decisions.
Market Expectations
Financial experts at Monex pointed out that today’s currency movement is being directly influenced by the weak economic indicators. They suggest that Banxico may take a more cautious approach in upcoming policy decisions to address the slowdown.
Banco Base predicts that the exchange rate will fluctuate within a range of 20.28 to 20.40 pesos per dollar during today’s trading session.
As investors digest these latest developments, market participants will be closely watching upcoming economic reports and potential monetary policy responses from Banxico, which could impact the peso’s trajectory in the coming weeks.
Puerto Vallarta, Mexico - The Mexican peso is depreciating on Friday morning, extending a week of losses following the confirmation that the country’s Gross Domestic Product (GDP) contracted in the last quarter of 2024. The economic slowdown, coupled with global currency fluctuations, has put additional pressure on the local currency.
