The Mexican peso appreciated 0.15% against the dollar following Banxico’s latest rate cut to 8.50%. Investors await GDP and inflation data for further direction.
The Mexican peso appreciated slightly against the U.S. dollar on Friday, in a relatively quiet session following a widely expected interest rate cut by the Bank of Mexico (Banxico). Market attention is now shifting to key domestic economic indicators set for release next week.
The peso closed the day at 19.4746 per dollar, up from 19.5028 in the previous session, marking a gain of 2.82 cents or 0.15%, according to data from Banxico. Despite the slight appreciation, the local currency has seen limited movement overall this week, reflecting investor caution amid shifting monetary conditions.
During Friday trading, the dollar-peso exchange rate fluctuated within a narrow range, touching a high of 19.5667 and a low of 19.4358. The Intercontinental Exchange’s Dollar Index (DXY), which measures the dollar against a basket of six major currencies, rose 0.29% to 101.10 points, signaling broader strength in the greenback.
Banxico on Thursday announced a 50-basis-point rate cut, lowering the benchmark interest rate to 8.50%. This was the third consecutive rate cut of the same magnitude and the seventh consecutive adjustment by the central bank’s governing body. The decision was unanimous, reinforcing a dovish tone in the central bank’s monetary policy outlook.
“It was the seventh consecutive adjustment by the governing body. The decision to cut the rate was unanimous, reinforcing the dovish outlook. Short-term expectations point to a slight strengthening of the dollar,” said Renato Campos, chief analyst at Squared Financial.
While the peso showed resilience in the wake of the rate decision, analysts note that the market is likely to remain subdued ahead of upcoming data releases. Mexico’s Gross Domestic Product (GDP) and inflation figures are due next Thursday and are expected to provide clearer direction for the currency and monetary policy expectations.
In a week-over-week comparison, the peso recorded a marginal depreciation of 0.04%, down from 19.4669 per dollar at the close last Friday.
The central bank’s latest decision comes amid ongoing efforts to support the domestic economy without triggering inflationary pressures. Market participants are now closely monitoring the next round of data, which could influence the timing and size of future rate moves.
Banxico has maintained that its policy decisions will remain data-dependent, with future rate adjustments contingent on the trajectory of inflation and overall economic performance.
As the peso stabilizes near the 19.47 level, traders and investors are bracing for potentially market-moving numbers in the coming days. With global monetary policy trends, especially in the United States, continuing to evolve, external pressures may also play a role in shaping the peso’s short-term path.
For now, the Mexican currency remains relatively steady, reflecting both cautious optimism and anticipation ahead of critical domestic economic readings.
The Mexican peso appreciated 0.15% against the dollar following Banxico's latest rate cut to 8.50%. Investors await GDP and . . .
