The Mexican peso fell to 19.1683 per dollar on Friday, its fourth consecutive loss, amid fears of U.S. involvement in the Israel-Iran war and rising inflationary pressures.
The Mexican peso extended its losing streak against the U.S. dollar on Friday, marking a fourth consecutive day of declines as global markets reeled from escalating tensions between Israel and Iran.
The exchange rate closed at 19.1683 pesos per dollar, a 0.67% drop from Thursday’s official close of 19.0416, according to data from the Bank of Mexico (Banxico). That’s a loss of 12.67 centavos in a single day.
The dollar traded in a volatile range, with a high of 19.1918 and a low of 19.0082. Meanwhile, the Intercontinental Exchange’s Dollar Index (DXY), which tracks the dollar against six major currencies, inched up 0.03% to 98.82.
Market jitters deepen over Middle East conflict
The peso’s losses this week have been fueled largely by geopolitical uncertainty, particularly the week-long military conflict between Israel and Iran, which continues to spook investors.
Analysts say pressure intensified Friday as global traders awaited clarity from U.S. President Donald Trump, who has hinted at a more direct U.S. military role in the region. While Israel continues to target Iranian nuclear facilities with missile strikes, claiming it is a preemptive move to prevent the development of an atomic weapon, Iran has denied any nuclear ambitions. Trump, however, has demanded “absolute surrender” from Tehran, escalating fears of a wider regional war.
“The situation in the Middle East is creating risk aversion, which has pushed investors to safe-haven assets like the U.S. dollar,” said one analyst.
Compared to last Friday’s closing price of 18.9396, the peso has now lost 22.87 centavos, or 1.21%, over the course of the week. In a market note, Vector Análisis warned that a further slide toward 19.30 or even 19.40 pesos per dollar is not out of the question.
Inflation and interest rates on the radar
Currency markets also absorbed updates from central banks this week. On Wednesday, the U.S. Federal Reserve left interest rates unchanged, as expected, but flagged possible short-term inflationary risks tied to tariffs. This added further strength to the dollar and stoked fears of tighter financial conditions globally.
Attention now turns to Mexico’s domestic monetary policy, with Banxico scheduled to announce its next rate decision next Thursday. Market participants overwhelmingly expect a 50-basis-point cut, as inflation remains under control and economic activity continues to lag.
At the same time, local traders are bracing for new inflation data, which could influence Banxico’s outlook and weigh further on the peso depending on the result.
Despite the peso’s recent weakness, some analysts suggest the decline remains within normal bounds given the global risk backdrop and is not yet cause for panic. Still, volatility is expected to continue next week as both geopolitical and economic factors unfold.
The Mexican peso fell to 19.1683 per dollar on Friday, its fourth consecutive loss, amid fears of U.S. involvement in . . .
