In the early hours of today’s market session, the US dollar opened trading at an average of 18.80 Mexican pesos. This marked an increase of 0.92% from the previous session’s exchange rate of 18.63 pesos per dollar. Over the past week, the US dollar has surged by 3.63%, contributing to a year-on-year rise of 11.96%.
The dollar has been on an upward trajectory for six consecutive sessions. Interestingly, the recent week has seen lower volatility in the dollar-peso exchange rate compared to the annual average, indicating fewer price fluctuations in recent days.
This latest increase in the dollar comes on the heels of Mexico’s second consecutive drop in the peso’s value against the dollar. This decline follows a report of marginal growth in Mexico’s quarterly GDP, driven by secondary and tertiary sectors.
The Mexican economy is experiencing a period of contrasts, and according to forecasts from the Bank of Mexico (Banxico), this trend is expected to persist through 2024. Banxico predicts that the exchange rate will range between 17.68 pesos and 18.67 pesos per dollar throughout the year. This conservative forecast comes after the national currency defied expectations in 2023 by breaking the 17 pesos per dollar barrier, a milestone not seen in eight years.
On the inflation front, Banxico expects a continued downward trend after inflation reached a historical high of 8.7% at the end of 2022. The central bank forecasts inflation to be at 4.02% in 2024, although achieving the ideal target of three percentage points is not anticipated in the near future.
Contrastingly, Banxico has a more optimistic outlook for GDP growth, projecting a rate of 2.29% for 2024. This projection underscores the mixed signals in the Mexican economy, where challenges such as currency fluctuations and inflation are balanced against positive GDP growth prospects.
These economic dynamics are crucial for investors, policymakers, and the general public as they navigate the complexities of the financial landscape. The continued monitoring of exchange rates, inflation trends, and GDP growth will be essential in understanding the broader economic picture and making informed decisions.
In the early hours of today's market session, the US dollar opened trading at an average of 18.80 Mexican pesos. This marked an increase of 0.92% from the previous session's exchange rate of 18.63 pesos per dollar. Over the past week, the US dollar has surged by 3.63%, contributing to a year-on-year rise of 11.96%.
