The Mexican peso continues its downward trajectory, recording its third consecutive session of losses. As of this morning, the U.S. dollar is trading at 20.62 pesos per unit, representing a 0.29% depreciation for the Mexican currency.
Over the last three trading sessions, the peso has declined by approximately 1.5%, impacted by global market factors, including renewed trade tensions linked to U.S. tariffs and the strengthening of the dollar in global markets.
Market Conditions and Banxico’s Expected Rate Cut
The peso’s weakening has coincided with a wave of liquidations ahead of the Bank of Mexico’s (Banxico) highly anticipated monetary policy decision. Analysts widely expect Banxico to cut its key interest rate by 50 basis points, lowering it to 9.5%, the lowest level since September 2022.
Should the central bank follow through with the rate reduction, it would mark a significant shift in monetary policy and pose potential challenges for local debt securities, which have historically attracted substantial foreign capital due to Mexico’s competitive yield differentials.
The dollar’s resurgence on the global stage, coupled with concerns over the future attractiveness of Mexican bonds, has fueled market unease. A narrowing interest rate gap between Mexico and other major economies, including the United States, could dampen investor interest in Mexican assets.
Dollar Exchange Rates at Major Mexican Banks
As of 7:46 a.m. today, February 6, 2025, the exchange rates for the U.S. dollar at major Mexican banks are as follows:
- BBVA Mexico: 19.75 pesos for purchase, 20.88 pesos for sale
- Citibanamex: 19.92 pesos for purchase, 21.07 pesos for sale
- Banco Azteca: 19.55 pesos for purchase, 20.79 pesos for sale
- Banorte: 19.30 pesos for purchase, 20.95 pesos for sale
- Banca Afirme: 19.60 pesos for purchase, 21.20 pesos for sale
- Scotiabank: 18.00 pesos for purchase, 21.50 pesos for sale
- Inbursa: 20.10 pesos for purchase, 21.10 pesos for sale
Outlook for the Peso
The peso’s performance will likely depend on Banxico’s decision and subsequent guidance on monetary policy. Investors and analysts will also be closely monitoring external factors, including the evolution of U.S. trade policies and the global economic outlook.
As Mexico navigates these economic challenges, the focus remains on maintaining financial stability while responding to shifting global market dynamics.
