Mexican peso trading dipped slightly to close at 19.0355 per dollar as markets reacted to Iran-Israel tensions and the Fed’s rate decision.
Puerto Vallarta, Mexico – The Mexican peso fell marginally against the US dollar in midweek trading as investors weighed rising tensions between Iran and Israel alongside the Federal Reserve’s latest monetary policy decision. The local currency closed at 19.0355 pesos per dollar on Wednesday, down from Tuesday’s 19.0145 close, marking a loss of 2.10 cents, or 0.11 percent, according to official data from the Bank of Mexico (Banxico).
The dollar’s intraday range stretched from a high of 19.0478 to a low of 18.9436. Meanwhile, the Intercontinental Exchange’s Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, inched up 0.05 percent to 98.87.
Fed holds rates steady
In its widely anticipated announcement, the Federal Reserve left its benchmark interest rate unchanged at a range of 4.25 percent to 4.50 percent. In the press briefing that followed, Fed Chair Jerome Powell warned that inflation could tick upward over the summer months due to recently imposed tariffs, though he stopped short of signaling an imminent rate hike.
“Although the Fed made no rate changes, in line with expectations, traders focused their attention on rate cut prospects later this year,” said financial consultant Juan Carlos Cruz Tapia. “At the moment, we could still expect a couple of rate cuts this year.”
Geopolitical tensions weigh
Heightened uncertainty in foreign exchange markets stemmed in part from escalating rhetoric between Iran and the United States. In a televised address, Iran’s Supreme Leader Ayatollah Ali Khamenei rebuffed US President Donald Trump’s demand for capitulation, warning that Iran “will not take orders.” The defiant tone added to risk aversion among currency traders, who typically favor the safe-haven dollar in times of geopolitical strain.
“The exchange rate remains hovering around 19 to the dollar, limited to high-volume zones between 18.90 and 19.05,” Cruz Tapia noted. “Among the key catalysts, the market will continue to monitor the evolution of tensions in the Middle East.”
Market outlook
Traders are now parsing both international developments and domestic economic signals for clues on the peso’s direction. On one hand, the Fed’s steady stance and talk of potential cuts later this year may temper dollar demand. On the other, persistent conflict in the Middle East could sustain risk-off flows into the dollar.
Analysts expect the peso to trade within its recent range unless fresh economic data or geopolitical events drive a clear move. Banxico’s next policy meeting and US inflation reports due later this month will offer further guidance.
Mexican peso trading dipped slightly to close at 19.0355 per dollar as markets reacted to Iran-Israel tensions and the Fed . . .
