The Mexican peso started Thursday with a slight decline following the U.S. Federal Reserve’s decision to cut its interest rate, sparking changes in global financial markets. The exchange rate for the U.S. dollar today, September 19, 2024, is 19.30 pesos per dollar, as investors continue reacting to the Fed’s move to ease monetary policy.
The Mexican currency experienced a 0.11% loss compared to Wednesday’s reference price, reflecting the market’s initial response to the Fed’s aggressive rate reduction strategy. The move signals a shift towards stimulating economic activity in the United States as inflation concerns moderate.
Federal Reserve’s Decision and Market Impact
On Wednesday, the Federal Reserve announced a significant cut to its benchmark interest rate as part of its effort to transition to a more accommodating monetary policy. Policymakers projected further reductions, including an additional half-percentage point drop later this year, a full percentage point decrease in 2025, and another half-point reduction in 2026.
This policy change is expected to have broad implications for international financial markets, particularly for currencies like the Mexican peso. As interest rates in the U.S. drop, the dollar’s attractiveness to investors may lessen, contributing to fluctuating exchange rates.
Exchange Rates in Mexican Banks
As of today, September 19, 2024, the exchange rates for the U.S. dollar in Mexico’s major banks are as follows:
- BBVA Mexico: 18.47 pesos for purchase, 19.60 pesos for sale
- Citibanamex: 18.76 pesos for purchase, 19.83 pesos for sale
- Banco Azteca: 18.25 pesos for purchase, 19.65 pesos for sale
- Banorte: 18.00 pesos for purchase, 19.60 pesos for sale
- Banca Afirme: 18.30 pesos for purchase, 19.90 pesos for sale
- Scotiabank: 17.00 pesos for purchase, 20.80 pesos for sale
- Inbursa: 18.90 pesos for purchase, 19.90 pesos for sale
Further Implications for the Mexican Economy
The peso’s decline comes as Mexico continues to navigate a delicate economic balance, with inflation in the country being relatively stable but susceptible to external factors like changes in U.S. monetary policy. The impact of a weaker peso could be felt in sectors reliant on imported goods, where costs may rise, potentially influencing inflation trends in the coming months.
Despite this decline, analysts suggest the peso remains resilient in comparison to previous years, benefiting from steady economic growth in Mexico, strong foreign investment, and a robust manufacturing sector, particularly in exports to the U.S. However, continued fluctuations in the dollar-peso exchange rate could introduce volatility into the Mexican economy, especially if the Fed follows through with more interest rate cuts.
Fuel Prices Remain Unchanged Amid Dollar Fluctuations
While the dollar has risen slightly, fuel prices in Mexico have remained stable. The price of gasoline across the country on September 19, 2024, saw no significant changes. This comes as a relief to consumers, particularly those concerned about the cost of living in the face of peso depreciation.
Mexico’s government has maintained subsidies and other mechanisms to keep fuel prices from climbing, a strategy that has proven effective despite external pressures. However, analysts warn that if the peso continues to lose value, it could eventually lead to higher fuel prices, as Mexico imports a large portion of its refined petroleum products.
Looking Ahead: Predictions for the Peso and Dollar
As the Federal Reserve signals further rate cuts in 2025 and beyond, economists anticipate that the peso may face additional downward pressure in the short term. However, the overall outlook for the Mexican economy remains cautiously optimistic, with many experts predicting a gradual recovery as inflation rates stabilize globally and U.S. monetary policy becomes clearer.
For now, investors will continue to closely monitor both U.S. and Mexican economic policies and their impact on the peso. While the currency’s value has taken a slight hit today, the situation remains fluid, with future developments in international financial markets likely to influence the peso’s trajectory.
The Mexican peso started Thursday with a slight decline following the U.S. Federal Reserve’s decision to cut its interest rate, sparking changes in global financial markets. The exchange rate for the U.S. dollar today, September 19, 2024, is 19.30 pesos per dollar, as investors continue reacting to the Fed’s move to ease monetary policy.
