The Mexican peso strengthened against the U.S. dollar on the first trading day of the week, supported by a weaker greenback and fresh inflation data that reinforced Banxico’s decision to pause its interest-rate cutting cycle.
The exchange rate closed at 17.2005 pesos per dollar. That compares with Friday’s close of 17.2592, according to Bank of Mexico (Banxico) data, a gain of 5.87 centavos—or 0.34%—for the currency.
During the session, the dollar traded between a high of 17.2819 and a low of 17.1540. The Intercontinental Exchange’s Dollar Index (DXY), which tracks the dollar against a basket of six major currencies, fell 0.81% to 96.84.
“The exchange rate started the week on a positive note, breaking through the 17.20 zone. If this move continues, we could get closer to the year’s low of 17.10. The key level this week could be 17 pesos,” said Juan Carlos Cruz, CEO of México Financiero.
A weaker dollar
The dollar weakened on Monday as markets boosted the Japanese yen following elections in Japan. The greenback’s decline also came as traders continued to speculate about a possible intervention to strengthen the yen against the dollar.
“The move that propelled the peso higher was primarily the weaker international dollar. The dollar index retreated, and that allowed several emerging-market currencies, including the Mexican peso, to breathe,” said Diego Albuja, a market analyst at ATFX LATAM.
Local inflation rises
At home, data released this morning supported the Bank of Mexico’s decision to pause interest-rate cuts. Consumer inflation rose 3.79% year over year in January, while core inflation climbed to 4.52%, according to INEGI.
“The data largely reflect the tax adjustments in the IEPS and the increase in the minimum wage. We anticipate that additional price pressures could materialize throughout 2026 due to factors such as the World Cup,” GBM said.
Markets await key U.S. data
Traders are watching this week’s official U.S. employment (nonfarm payrolls) and inflation reports, which will help the Federal Reserve (Fed) gauge its next monetary policy moves after pausing rate cuts in January.
