The Mexican peso strengthens at midday on Wednesday, building an eight-day winning streak and trading near 18.26 per dollar, its firmest level since July 2024 after the Independence Day holiday.
The driver is the Federal Reserve’s 25-basis-point rate cut and guidance that points to more easing this year. The dollar index slipped to 2022-era lows as traders priced in that softer path, helping lift the peso.
Spot flows briefly pushed the exchange rate near 18.2008 before it steadied around 18.24 by early afternoon in Mexico City. The Banxico FIX for today sits around 18.3635, reflecting a market that leaned stronger in live trading.
Mexican peso strengthens
Local rates still offer a cushion. Banxico’s policy rate is 7.75% after an August trim, leaving Mexico with a positive differential that continues to favor carry strategies even as global yields drift. “El dólar se debilita y el peso se aprecia por la expectativa de dos recortes más este año”, notó Banco Base’s Gabriela Siller after the Fed move.
Momentum also matters. The peso logged seven straight gains by Monday at 18.3461, a trend now extended to eight with markets reopening after the holiday. Equities notched highs alongside the move, underscoring broad risk appetite for Mexican assets.
What could move it next
All eyes now turn to Banxico’s September 25 decision. A fresh 25-bp cut is the consensus among surveyed analysts, but guidance will matter as much as the move. A faster easing pace could narrow the rate gap and cool the rally; a steadier hand could keep support intact while global dollar weakness does the heavy lifting. Watch U.S. data and the dollar index path for near-term direction.
With the Fed pivoting and the dollar softer, the peso sits at its strongest levels since mid-2024. The next catalyst is Banxico’s tone this month—and whether the global dollar slide has further to run.
