The Mexican peso appreciated 0.35% against the US dollar, closing at 18.1919 pesos per dollar, according to Banxico data. This gain occurs one day before the Federal Reserve's two-day meeting, expected to end with a 25 basis point rate cut.
The Mexican peso-dollar exchange rate showed resilience on Monday, December 9, 2024, with a 0.35% appreciation, equivalent to 6.40 centavos, settling at 18.1919 pesos per greenback, according to official Banco de México (Banxico) figures.
In bank windows, the dollar sold for 18.66 pesos, per Banamex. Meanwhile, the dollar index (DXY) rose 0.11% to 99.20 points, and the Bloomberg dollar index gained 0.04% to 1,214.62 units. Yields on 10-year US bonds stood at 4.14%, compared to 8.83% for Mexican 10-year bonds.
Among emerging currencies, the Mexican peso was one of the strongest gainers against the dollar, outperforming currencies like the Colombian peso (-0.54%), Russian ruble (-0.49%), and Philippine peso (-0.42%).
Felipe Mendoza, CEO of IMB Capital Quants, noted the peso's strength but cautioned on risks: “En conjunto, la lectura para el mercado es de un peso mexicano que muestra resiliencia significativa, apoyado en fundamentos relativamente sólidos, pero enfrenta riesgos crecientes por tres frentes: un dólar que podría fortalecerse si mañana la Fed envía un mensaje menos dovish, un Banxico que seguirá recortando tasas y restará parte del atractivo del carry, y un frente comercial y geopolítico más incierto bajo la administración Trump, especialmente por los temas de aranceles, agua y posibles ajustes al T-MEC”.
The Fed's meeting begins Tuesday and could shape the peso's path, particularly if rate cut expectations shift due to local inflationary pressures that might prompt Banxico to pause its easing cycle.