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Quick overview<\/p>\n
The Mexican peso has declined for four consecutive sessions against the U.S. dollar, closing at 18.4847 pesos per dollar.Weak domestic economic data and expectations of a dovish Federal Reserve have contributed to the peso’s depreciation.Mexico’s economy contracted in Q3 2025, with a notable 0.6% drop in the Global Indicator of Economic Activity in September.Comments from U.S. Fed officials regarding potential rate cuts have influenced market expectations and the peso’s performance.<\/p>\n
The Mexican peso extended its losing streak against the U.S. dollar, marking four consecutive sessions of declines amid weak domestic economic data and shifting expectations surrounding the Federal Reserve\u2019s monetary policy path.<\/p>\n
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The exchange rate closed on Friday, November 21, at 18.4847 pesos per dollar, according to official figures from the Bank of Mexico (Banxico). This compares with 18.3892 in the previous session, meaning the peso weakened by 9.5 centavos, or 0.52%.<\/p>\n
The U.S. Dollar Index (DXY), which tracks the greenback against six major currencies, slipped 0.02% to 100.19 points, though it briefly touched its highest levels since late May during the session.<\/p>\n
USD\/MXN<\/p>\n
The exchange rate is being pressured by the dollar\u2019s strength \u201camid heightened market nervousness, as well as weak local data that reinforce the narrative of an economic slowdown.\u201d<\/p>\n
Mexican Economic Data<\/p>\n
Mexico\u2019s economy contracted in the third quarter, in line with preliminary estimates. A weak industrial sector offset upward revisions in both agricultural activity and services. The Global Indicator of Economic Activity (IGAE) confirmed a downturn in September 2025. Despite the revision, GDP still posted a 0.3% quarterly decline in Q3.<\/p>\n
In September alone, IGAE fell 0.6% month-over-month, its sharpest monthly drop so far in 2025, according to the national statistics agency Inegi. On an annual basis, activity also fell 0.6%, with secondary activities contracting 3.3% compared to September 2024.<\/p>\n
Minutes from Banxico\u2019s latest policy meeting, released Thursday, were interpreted as moderately dovish, reinforcing market expectations of a 25-basis-point rate cut next month. Carry-trade dynamics continue to play a major role in peso\u2013dollar movements, meaning any narrowing of interest rate differentials\u2014or an uptick in global or Mexico-specific risk\u2014tends to push the exchange rate higher.<\/p>\n
Interest Rates in the U.S.<\/p>\n
In the United States, comments from New York Fed President John Williams that the central bank could still cut rates \u201cin the near term\u201d without jeopardizing its inflation goal prompted traders to raise the odds of a December rate reduction. Still, several Fed officials have voiced skepticism about the need for further easing, given persistent inflation following the 25-basis-point cuts in September and October.<\/p>\n
For the week, the peso posted a negative performance versus last Friday\u2019s close of 18.3262. The currency lost 15.85 centavos, or 0.86%, after briefly touching its strongest level in six weeks earlier in the period.<\/p>\n
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Ignacio Teson <\/p>\n
\n Economist and Financial Analyst\n <\/p>\n
\n Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.\n <\/p>\n
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