Puerto Vallarta, Mexico – The Mexican peso lost ground against the U.S. dollar on Thursday, pressured by a broader strengthening of the greenback. Growing concerns about the economic outlook laid out by the Federal Reserve contributed to the peso’s depreciation, reflecting shifts in global monetary policy and trade dynamics.
According to the Bank of Mexico (Banxico), the exchange rate closed the day at 20.1481 pesos per dollar, compared to 20.0540 pesos the previous day. This represents a loss of 9.41 cents—or 0.47 percent—for the local currency. During Thursday’s trading, the dollar ranged from a high of 20.2702 to a low of 20.0262 pesos per dollar.
Meanwhile, the Intercontinental Exchange’s Dollar Index (DXY), which measures the greenback’s strength against a basket of six major currencies, fell 0.32 percent to 103.80 points. Despite the slight DXY decline, dollar demand remained robust amid uncertainty surrounding global trade and economic growth forecasts.
Central Bank Outlook
The Federal Reserve left its key interest rate unchanged in its policy decision announced Wednesday. However, officials revised inflation forecasts higher for the year and lowered projections for U.S. economic growth. These adjustments signaled potential challenges ahead, including continued cost pressures and a possible slowdown.
“The peso is affected by a strengthening of the dollar following the Fed’s decision,” noted Monex Grupo Financiero in a research note. Chairman Jerome Powell highlighted in his post-meeting comments that tariffs are weighing on both inflation and broader economic activity in the United States.
Across the Atlantic, European Central Bank President Christine Lagarde echoed similar concerns, warning of higher inflation if trade disputes escalate—particularly a potential trade war with the United States—which could hamper productive activity in the eurozone.
Euro vs. Peso and Other Indicators
Alongside the dollar’s rally, the euro slipped to around USD 1.0850. Against the Mexican peso, it moved in the opposite direction: from its previous close of 21.8793 pesos to end Thursday at 21.8469 pesos—a modest gain of 3.24 cents, or 0.15 percent.
Analysts generally expect Banxico to again cut its key interest rate at its meeting next week, potentially by 50 basis points. That outlook aligns with a similar adjustment enacted in early February, aimed at supporting economic activity.
Later today, a Citi survey of specialists will be released, offering updated views on interest rates, growth, and inflation. These results could further influence market sentiment, especially given ongoing trade friction.
In the United States, labor market data showed a slight uptick in new unemployment claims last week. Meanwhile, the National Institute of Statistics and Geography (INEGI) in Mexico reported that economic activity contracted by 0.7 percent in February, according to the Global Indicator of Economic Activity (IGAE).
With an intensifying trade environment and evolving monetary policy strategies, the peso remains sensitive to changing global conditions. Markets will closely watch developments from Banxico and global central banks in the days ahead to gauge further direction for currencies and investor sentiment.
