Mexican Peso Registers Largest Weekly Depreciation Since Early November

Puerto Vallarta, Mexico – The Mexican peso experienced its largest weekly depreciation since early November, driven by low liquidity during the December holiday season and a strengthening U.S. dollar as markets anticipate a more cautious stance from the Federal Reserve regarding interest rate cuts in 2025.

According to the Bank of Mexico (Banxico), the peso closed at 20.3192 per dollar on Friday, marking a 1.42% depreciation for the week. This represents the most significant weekly loss since the week ending November 1, when the peso fell by 1.54%. On Friday alone, the peso weakened by 0.55%.

The Intercontinental Exchange’s Dollar Index, which measures the greenback against six major global currencies, rose by 0.35% to 108 units, reinforcing the dollar’s dominance.

Market Caution and Political Uncertainty

Jorge Gordillo, director of Analysis at CiBanco, attributed the peso’s performance to increased caution among traders in a market characterized by low trading volume.

“The aversion shown by traders at the end of the week stemmed from heightened uncertainty surrounding Donald Trump’s potential return to the White House,” Gordillo said. He emphasized that concerns over tariffs, inflation, and the terminal level of the Fed’s interest rate contributed to profit-taking among investors.

“It is expected that on January 20, the president-elect will commence his term with aggressive economic and immigration policies,” he added.

Felipe Mendoza, Financial Markets Analyst at ATFX Latam, echoed these sentiments, noting that the peso’s depreciation reflects a market closely monitoring local and global economic signals as Mexico approaches the end of the year.

Mendoza highlighted the importance of tracking U.S. economic indicators and any statements that could hint at forthcoming monetary policy adjustments.

Speculative Peso Contracts on the Rise

Despite the peso’s depreciation, speculative contracts favoring the Mexican currency on the Chicago Mercantile Exchange (CME) increased for the third consecutive week.

As of December 20, the net long position for the peso reached 14,600 contracts, reflecting an 84.81% rise compared to the previous week. This upward trend indicates that some investors continue to bet on the peso’s resilience in the longer term.

Gabriela Siller, director of Analysis at Banco Base, observed that liquidity in the foreign exchange market declined throughout the week, a typical occurrence in the lead-up to the Christmas and New Year holidays.

“Lower liquidity reduces market efficiency, often resulting in volatile trading sessions even in the absence of significant events,” Siller said.

Peso Among Most Depreciated Emerging Currencies

The peso concluded the week as the fifth most depreciated currency against the dollar, outpaced only by the Russian ruble, South African rand, South Korean won, and Brazilian real.

Leading the declines, the ruble depreciated by 2.67%, followed by the rand at 2.08%, the won at 1.93%, and the real at 1.83%. In contrast, the Malaysian ringgit appreciated by 0.81%, the Hungarian forint by 0.79%, and the Swedish krona by 0.27%.

Siller attributed the broader weakness among emerging market currencies to global geopolitical risks and economic uncertainty.

“The crash of an Azerbaijani passenger plane on December 25, coupled with Israel’s military actions against Houthi rebels in Yemen, reminded markets that tensions in the region persist,” she noted.

Additionally, speculation surrounding Japan’s monetary policy contributed to market jitters.

“The Bank of Japan’s forward guidance indicated the potential for further rate hikes in 2025, driven by rising wages and expected domestic consumption growth,” Siller said. “Meanwhile, anticipated economic policies under a new Trump administration could bolster the dollar, reinforcing upward pressure on U.S. interest rates.”

Outlook for the Peso

Analysts suggest the peso’s outlook will depend on evolving economic conditions in the United States, particularly regarding inflation, interest rates, and trade policies. As the new year approaches, market participants are expected to remain cautious, closely monitoring policy developments and geopolitical events that could shape currency dynamics.



Trending News on PVDN

  • baja-california-sur-tourism-growthBaja California Sur tourism growth continues despite recent violent events Baja California Sur tourism growth remains strong as nearly two million visitors arrive in early 2025, driven by safety measures and solid hotel occupancy rates. Baja California Sur has seen Baja California Sur tourism growth gather pace in the first half of 2025, drawing nearly two million visitors despite isolated reports of violence. According to…
  • cables-underground-plan-cdmxMexico City Telecommunications Law mandates companies to bury cables underground Mexico City’s new Telecommunications Law mandates burying overhead cables to improve safety, streamline connectivity, and enhance the urban image with a comprehensive cables underground plan. On Thursday, July 10, 2025, Mexico City took a decisive step to modernize its urban landscape and bolster public safety by approving a new Telecommunications and Broadcasting Law that requires…
  • ensenada airportEnsenada international airport project unveiled The Ensenada international airport project will feature a new runway, passenger terminal and commercial zone near Valle de Guadalupe, boosting regional connectivity and tourism with an investment of MXN 5,500 million for the Ensenada international airport. Ensenada will soon join Mexico’s growing network of modern aviation hubs. During the International Civil Airports Council (ACI) congress,…
  • cancun-boosts-tourism-diversification-sargassumCancún boosts tourism diversification to counter sargassum surge Cancún tourism diversification expands beyond beaches to water parks, cultural sites, religious tours and nightlife to tackle sargassum challenges and keep visitors engaged. Cancún’s iconic beaches have long drawn sun-seeking travelers from around the world. This summer, however, an influx of sargassum seaweed threatens that draw. To keep visitor numbers strong and protect local businesses,…
  • texas floodsUS thanks Mexico for sending rescue teams to assist in Texas flood The US government publicly thanked Mexico flood rescue teams for sending firefighters and civil protection specialists to assist search and rescue efforts in Kerrville, Texas, after deadly July 4 weekend floods. The United States government on July 8, 2025, formally thanked Mexico for its swift deployment of emergency personnel to aid search and rescue operations…
  • baja california tourist taxGovernment expects 256 million pesos from Baja California Sur tourist tax The Government of Baja California Sur aims to collect up to 256 million pesos in 2025 through the new “Embrace It” foreign visitor contribution, funding infrastructure and sustainability. The Government of Baja California Sur (BCS) plans to raise as much as 256 million pesos in 2025 by expanding a fee charged to international tourists under…
  • quintana-roo-sargassum-beaches-report-july-12-2025Sargassum levels hit moderate to excessive on 68% of monitored beaches in Quintana Roo Today, July 12, 2025, 68% of monitored Quintana Roo sargassum beaches report moderate to excessive algae arrivals while 25% remain clean. See the full list of clean and affected shores and learn how authorities are tackling the influx. The annual surge of sargassum has returned to Quintana Roo’s shores, with 68% of monitored beaches reporting…
  • guanajuato-free-700-workers-human-trafficking-labor-exploitationGuanajuato Authorities Free 700 Workers in Human Trafficking and Labor Exploitation Case An inter-institutional operation in Dolores Hidalgo freed 700 people from a ranch in a human trafficking and labor exploitation case and led to a narcotics probe. Dolores Hidalgo, Guanajuato - The Guanajuato Attorney General’s Office executed a landmark raid on a rural ranch in Dolores Hidalgo, freeing approximately 700 people who had been subjected to…
  • ensenada airportSan Miguel de Allende new airport plan drives regional growth Learn how the San Miguel de Allende airport plan and four other new regional airports will boost tourism, logistics, and economic development across Mexico. On July 11, 2025, Carlos Manuel Merino Campos, director of Airports and Auxiliary Services (ASA), confirmed that the agency is evaluating the construction of a new airport in San Miguel de…
  • gender-revelation-pv-disappears-profepa-investigationGender Reveal Company at Center of Puerto Vallarta Controversy Disappears Revelación de Género PV vanished from social media after environmentalists and Profepa launched an investigation into its impact on Los Arcos de Mismaloya’s. Puerto Vallarta, Jalisco — Revelación de Género PV, the operator behind the recently popular “gender reveal” boat tours at Los Arcos de Mismaloya, has abruptly vanished from social media and disconnected its…