peso value

Mexico peso hits 3-month low, market expects more intervention

Mexico’s peso slumped to a three-month low on Wednesday, with the speed of its recent tumble sparking speculation the central bank could soon intervene to try and cushion the currency’s fall.

The peso sank as much as 0.9 percent to 18.4510 per dollar, its weakest since February. The peso has lost nearly 7 percent this month, making it the second worst performer among the world’s 36 most-traded currencies, behind the South African rand.

A prominent group of Mexican economists on Tuesday said the peso was under a speculative attack, and analysts said the country’s central bank could soon sell dollars directly to the market, as it did in February.

“They are willing to use their firepower,” said Alberto Ramos, an economist at Goldman Sachs in New York.

“You need to anchor the currency at some point, if the peso goes to 19 or 20 (to the dollar) that could change the inflation outlook and the central bank is very mindful of that,” Ramos said.

By midday Wednesday, the peso had pared losses to trade 0.45 percent lower at 18.3625.

A sharp peso drop in February pushed Mexico’s central bank to directly intervene in currency markets for the first time since 2009 and to unexpectedly raise interest rates after an unannounced meeting.

Then, Mexican policymakers said the peso was being targeted by electronic trading programs and that its losses did not match with the relatively sound position of the economy.

On Tuesday, Deputy Central Bank Governor Javier Guzman said the bank may need to raise interest rates if global events hit the peso enough to affect inflation expectations. So far, inflation has been slower than expected.

Emerging market currencies have been slammed by renewed expectations the U.S. Federal Reserve could tighten borrowing costs, which could sap demand for higher-yielding but riskier assets.

The Mexican peso is one of world’s most liquid currencies and unlike many other emerging markets there are no capital controls on its trade. That makes it easier to bet against the peso when global sentiment on risky assets turns sour.

“It’s a cheap proxy for expressing a negative view on emerging markets,” said UBS strategist Manik Narain.

Mexico’s peso bonds are among the most widely held debt among those issued in emerging market currencies.

Foreign investors hold over 2 trillion pesos ($109 billion) in peso debt, and many need to hedge their positions when the peso slumps, further driving volatility, Narain said.

($1 = 18.3800 Mexican pesos) (Additional reporting by Sujata Rao-Coverley in London Editing by W Simon)

Mexico's peso slumped to a three-month low on Wednesday, with the speed of its recent tumble sparking speculation the central bank could soon . . .

Follow Us On Google News | Get Our Newsletter



Trending News on PVDN

  • puerto-vallarta-rainfall-hurricane-flossie-july-2025Puerto Vallarta braces for torrential rains as Hurricane Flossie gains strength Puerto Vallarta faces a high risk of flooding as Hurricane Flossie intensifies in the Pacific. Torrential rains and overwhelmed drainage systems pose major challenges for the city. Puerto Vallarta, a city wedged between the Sierra Madre mountains and the Pacific Ocean, is no stranger to dramatic weather shifts—but this summer, the skies are testing the…
  • raw-sewage-playa-los-muertos-puerto-vallartaMore Raw Sewage Dumping at Playa Los Muertos Appear to Come From Local Hotel Business owners in Puerto Vallarta are demanding action after raw sewage was discovered leaking onto Playa Los Muertos, raising public health and tourism concerns. A raw sewage leak at Playa Los Muertos in Puerto Vallarta has sparked outrage among local tourist service providers and business owners, who say the contamination is driving away visitors and…
  • hurricane-flossie-strengthens-july-1-2025Hurricane Flossie will bring tropical storm conditions to parts of Guerrero, Michoacán, Colima, and Jalisco Hurricane Flossie intensifies off Mexico's Pacific coast with winds near 90 mph. Heavy rain, flooding, and tropical storm conditions expected in parts of Guerrero, Michoacán, Colima, and Jalisco. Hurricane Flossie continued to intensify early Tuesday morning as it moved west-northwestward off the coast of southwestern Mexico, prompting tropical storm warnings and watches across multiple states.…
  • Where do foreigners come from and where do they live in MexicoMexico City Protest on July 5 Challenges Gentrification and Airbnb’s Impact on Housing Residents of Roma and Condesa will gather at Parque México on July 5 to protest gentrification, rising rents, and Airbnb’s effect on local housing. This Saturday, July 5, Mexico City will witness its first organized citizen protest against gentrification—a peaceful but urgent gathering taking place at 3:30 p.m. at the Lindbergh Forum in Parque México,…
  • cabo-corrientes-warning-canceled-hurricane-flossieCabo Corrientes Spared as Hurricane Flossie Warning Lifted, But Pacific Coast Still at Risk Cabo Corrientes no longer under tropical storm watch as Hurricane Flossie nears Mexico's Pacific coast, with dangerous winds and heavy rains threatening Michoacán, Colima, and Jalisco. The tropical storm watch for Cabo Corrientes was officially canceled Tuesday, offering a measure of relief for the scenic coastal town as Hurricane Flossie continues to churn off Mexico’s…
  • no-damage-jalisco-hurricane-flossieNo Damage Reported in Jalisco as Hurricane Flossie Moves Away While Mexico's Weather Service predicted heavy rains, Hurricane Flossie causes no damage along Jalisco’s coast. The Category 3 storm brings light rain and moderate waves as it moves away from the region. The coasts of Jalisco remain calm and largely unaffected following the passage of Hurricane Flossie, a powerful Category 3 storm that is now…
  • cancun-2025-sargassum-beaches-and-activitiesSargassum won’t ruin your Cancun vacation, there are plenty of clean beaches and tourist activities As the 2025 sargassum season continues through September, visitors to Cancun can still enjoy clear beaches like Playa Delfines and Playa Caracol. As the 2025 sargassum season intensifies across Quintana Roo, tourists are finding it more difficult to enjoy the region’s iconic white-sand beaches without encountering the unsightly brown seaweed. While the influx of sargassum…
  • tropical-storm-flossie-hurricane-mexico-pacific-coastTropical Storm Flossie to Strengthen into Hurricane as It Tracks Along Mexico’s Pacific Coast Tropical Storm Flossie is expected to become a Category 2 hurricane by July 2 as it moves parallel to Mexico’s Pacific coast, bringing dangerous rainfall, wind, and surf. Tropical Storm Flossie is on the verge of forming from Tropical Depression Six-E and is forecast to strengthen rapidly into a hurricane as it parallels Mexico’s southwestern…
  • oregon-murder-fugitive-extradited-puerto-vallartaFugitive Wanted for 2008 Oregon Homicide Captured in Puerto Vallarta and Extradited to U.S. Jesús Rodríguez Borrayo, a fugitive for 17 years, was extradited from Mexico to Oregon for his role in a 2008 drive-by shooting that left one dead. He was located in Puerto Vallarta. A man wanted for murder and other violent crimes in the United States for nearly two decades has been extradited after being found…
  • tropical-wave-7-floods-bacalar-chetumal-emergency-responseTropical Wave Floods Bacalar and Chetumal as Navy and Army Activate Emergency Plans Torrential rains from Tropical Wave 7 flood Bacalar and Chetumal, prompting emergency response from the Navy and Army. Several towns remain isolated in southern Quintana Roo. Torrential rains caused by Tropical Wave Number 7 have flooded multiple communities in southern Quintana Roo, prompting a joint emergency response from Mexico’s Navy and Army. Authorities activated their…
Scroll to Top