Return of Superpeso? The Mexican Peso Reached its Best Day in 17 Days on Thursday

The Mexican peso experienced its best day in over two weeks on Thursday, bolstered by the weakening U.S. dollar as macroeconomic data from the United States signaled that the Federal Reserve (Fed) could begin reducing the cost of credit next week. The peso registered a gain of 1.62%, or 32.11 cents, closing at 19.4724 pesos per U.S. dollar, marking its strongest level since August 26.

The peso’s surge comes in the context of significant international economic developments. The European Central Bank (ECB) announced a 0.25% cut in interest rates, bringing them to 3.5%, the lowest level since June 2023. Meanwhile, in the U.S., producer price inflation exceeded expectations but continued its downward trajectory, contributing to the weakening of the dollar.

In Mexico, the peso initially opened slightly weaker against the dollar, but judicial reforms passed by at least 18 local congresses helped buoy domestic confidence. According to data from the Bank of Mexico, the peso traded within a range of 19.6800 at its highest and 19.4660 at its lowest on Thursday. Among emerging market currencies, the peso was the second most appreciated, trailing only the Russian ruble, according to data from financial services provider Base.

Despite this rally, the peso has depreciated by 14% so far this year, placing it as the third worst-performing currency among a basket of emerging markets.

Market Analysts Predict Peso Support at 19.5

Analysts point to the weakening of the U.S. dollar as a key factor behind the peso’s recent strength. Revised down readings of the U.S. Producer Price Index (PPI) for August—though September’s figures exceeded expectations—suggest that inflationary pressures in the U.S. are easing, paving the way for an anticipated interest rate cut by the Federal Reserve. Alexander Londoño, an analyst at ActivTrades, noted that the Fed is widely expected to reduce rates by at least 0.25 percentage points in the coming week, which is adding pressure to the dollar.

The Mexican peso, which retreated from a high of 20.13 to approach 19.5 pesos per dollar, may find support at this level, according to Londoño. Despite the peso’s recent gains, analysts still see the currency maintaining an upward trend in the medium term.

The U.S. dollar’s overall weakness was evident across global markets, with the weighted index measuring the dollar’s performance against a basket of six major currencies falling by 0.42% to 101.230.

Mexican Stock Exchange Achieves Best Performance in Two Months

The gains in the peso coincided with a strong performance by the Mexican Stock Exchange (BMV). On Thursday, the BMV saw its largest single-day gain since July 10, with a 1.57% rise, translating into an increase of 803.97 points, closing the day at 51,999.73.

The stock market rally was driven by strong performances from several key stocks, including Inbursa (up 3.80%), Traxión (3.73%), Banorte (3.62%), Bajío (3.25%), América Móvil (1.50%), Asur (2.26%), and Bimbo (2.40%). These gains reflect a broad improvement in market sentiment and a stronger appetite for risk among investors.

Inflation and Employment Data Point to Fed Rate Cut

The U.S. Bureau of Labor Statistics (BLS) released the latest Producer Price Index (PPI) data for August, showing a monthly variation of 0.2%, slightly higher than market expectations of 0.1% and the previous month’s 0% reading. On an annual basis, producer price inflation stood at 1.7%, down from the previous 2.1%, while core PPI inflation (excluding food and energy) increased marginally to 3.3%, from 3.2%.

The higher-than-expected rise in U.S. producer prices was largely attributed to increased service costs, but analysts from Intercam noted that the overall trend remains consistent with declining inflation. The Fed is expected to take this data into account at its upcoming policy meeting, with a growing consensus that the central bank will begin easing its monetary stance.

In another key economic indicator, the number of initial claims for unemployment insurance in the U.S. rose slightly to 230,000 in the week ending September 7, up by 2,000 from the previous week. This data further supports the case for a reduction in the Fed’s federal funds rate, potentially signaling the start of a less restrictive monetary policy.

Global Markets Respond to Economic Data

The prospect of a Fed rate cut has spurred a surge in risk appetite across global financial markets. On Wall Street, major indices posted gains, with the S&P 500 rising by 0.75% to 5,595.76 points, the Dow Jones up 0.58% to 41,967, and the Nasdaq climbing 1.02% to 17,572.43.

Commodities also benefitted from the dollar’s weakness and the general optimism surrounding potential interest rate cuts. Brent crude oil prices increased by 1.97% to $71.97 per barrel, while West Texas Intermediate (WTI) crude saw a 2.47% jump, closing at $68.97 per barrel.

The Mexican peso’s rally on Thursday reflects the broader trend of dollar weakness and shifting global economic conditions. With the Federal Reserve expected to announce a rate cut next week, the peso could continue to strengthen in the short term, although long-term challenges remain for the Mexican currency, which has experienced significant depreciation this year. Additionally, the performance of the Mexican Stock Exchange and global markets highlights the growing optimism among investors as they anticipate a more accommodative monetary policy from the Fed.

The Mexican peso experienced its best day in over two weeks on Thursday, bolstered by the weakening U.S. dollar as macroeconomic data from the United States signaled that the Federal Reserve (Fed) could begin reducing the cost of credit next week. The peso registered a gain of 1.62%, or 32.11 cents, closing at 19.4724 pesos per U.S. dollar, marking its strongest level since August 26.

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