USD/MXN is the US dollar against the Mexican peso. It is one of the most liquid and heavily traded emerging-market currency pairs and is often used as a proxy for broader emerging-market risk sentiment. The peso is closely tied to the US economy, its dominant trading partner under USMCA, and to high domestic interest rates that make it a popular carry trade. It can sell off sharply on US-Mexico trade or political tension.
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Why is US Dollar/Mexican Peso FX Spot Rate (USDMXN.FOREX) moving?
Peso swings on Banxico hold, USMCA risk, US jobs and Gulf War
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Banxico holds rates, peso supported Mexico's central bank kept its key interest rate at 6.50%, which supports the peso because higher rates attract investors seeking yield. A stronger peso means USDMXN falls, as one dollar buys fewer pesos.
Explains a key monetary force that pushed the peso up and USDMXN down.
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USMCA cancellation talk lifts USD Speculation that the USMCA free trade deal could be cancelled hurt the Mexican peso, as trade uncertainty makes investors avoid Mexican assets. The dollar strengthened, pushing USDMXN higher.
Shows a major trade risk that weakened the peso and lifted USDMXN.
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Weak US jobs data weighs on dollar A softer-than-expected US jobs report made investors think the Federal Reserve may not raise rates, weakening the dollar. The peso gained, and USDMXN fell, as the peso became the stronger currency.
Highlights a key US economic release that drove the dollar down and peso up.
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Gulf War escalation hurts risk appetite Escalation of the Gulf War made investors nervous, reducing demand for risky assets like the Mexican peso. The dollar, seen as a safe haven, strengthened, pushing USDMXN higher.
Shows a geopolitical shock that weakened the peso and supported the dollar.
Q3 2026
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Peso swings on Banxico hold, USMCA risk, US jobs and Gulf War
▼
Banxico holds rates, peso supported Mexico's central bank kept its key interest rate at 6.50%, which supports the peso because higher rates attract investors seeking yield. A stronger peso means USDMXN falls, as one dollar buys fewer pesos.
Explains a key monetary force that pushed the peso up and USDMXN down.
▲
USMCA cancellation talk lifts USD Speculation that the USMCA free trade deal could be cancelled hurt the Mexican peso, as trade uncertainty makes investors avoid Mexican assets. The dollar strengthened, pushing USDMXN higher.
Shows a major trade risk that weakened the peso and lifted USDMXN.
▼
Weak US jobs data weighs on dollar A softer-than-expected US jobs report made investors think the Federal Reserve may not raise rates, weakening the dollar. The peso gained, and USDMXN fell, as the peso became the stronger currency.
Highlights a key US economic release that drove the dollar down and peso up.
▲
Gulf War escalation hurts risk appetite Escalation of the Gulf War made investors nervous, reducing demand for risky assets like the Mexican peso. The dollar, seen as a safe haven, strengthened, pushing USDMXN higher.
Shows a geopolitical shock that weakened the peso and supported the dollar.
News & notes movingUSDMXN.FOREX
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USDMXN.FOREX▲
MUFG Flags EM Carry Unwind Pressuring LatAm Currencies
MUFG's Derek Halpenny says rising rates volatility is driving a broader unwind of emerging-market FX carry trades, with Latin American currencies coming under particular pressure. USD/MXN has surged as implied volatility jumps, squeezing long leveraged positions in the Mexican peso. The carry liquidation is pressuring LatAm currencies more broadly, according to the MUFG note.
Banxico holds rate at 6.50%, drops forward guidance in signal it may open the door to policy shifts
Mexico's central bank, Banxico, announced it was holding its policy rate at 6.50% at its meeting on Thursday, September 24, in line with market expectations, but removed from its statement the forward guidance that had said the rate would be held at that level, a signal that it is opening the door to greater flexibility in adjusting monetary policy ahead. Banxico's five-member governing board voted unanimously to keep the policy rate at 6.50%, dropping the wording that said it was appropriate to keep the reference rate at its current level, which had appeared in the three previous statements. The statement said monetary policy decisions will depend on economic data, assessing the development of the inflation slowdown as well as the pass-through of the exchange rate to consumer prices, an economy that has not yet recovered its full potential, and inflation expectations in the system. It kept its forecast that headline inflation will gradually decline toward the 3.0% target in the fourth quarter of 2027, and said inflation risks remain tilted to the upside, while downside risks to economic activity persist amid uncertainty over U.S. economic policy and prolonged geopolitical conflicts. Although the Fed voted to raise its policy rate by another 0.25% at its September meeting, Banxico reiterated that Mexico's monetary policy does not need to move automatically in step with the Fed, because the macroeconomic conditions of the two countries differ.
Banxico Holds Rate at 6.50% as Mexican Peso Slides to April Lows
The Bank of Mexico held its benchmark interest rate unchanged at 6.50%, sending the Mexican Peso to April lows against the US Dollar. The central bank said it does not treat the interest rate differential as a primary factor in setting monetary policy. The Peso extended its losses against the Dollar on Thursday following the decision.
USDMXN.FOREX · Monetary · Positive Banxico held rates at 6.50% and the Peso slid to April lows against the Dollar after the decision.
MX-10Y.GB · Monetary · Neutral Banxico held its policy rate at 6.50%, leaving the 10Y yield direction unclear as the decision was a hold with no explicit easing/bias signal.
Societe Generale Flags Renewed Mexican Peso Downside as USD/MXN Breaks 200-DMA
Societe Generale analysts, including Kenneth Broux, say downward momentum has returned to the Mexican Peso after USD/MXN broke above a multi-month descending trend line and reclaimed its 200-day moving average for the first time since April 2025. The move marks the pair's first close back above that long-term average in roughly a year, reversing the trend that had capped the dollar against the peso for months. According to the analysts, the break of the descending trend line signals that the prior peso-supportive momentum has faded. Reclaiming the 200-day moving average is the technical confirmation Societe Generale points to for renewed downside risk in the Mexican currency.
Rabobank Sees USD/MXN Holding 17-18 Range Over Next 12 Months
Rabobank analysts Christian Lawrence and Molly Schwartz expect USD/MXN to trade broadly between 17 and 18 over the next 12 months. They see room for both Fed and Banxico rate expectations to be repriced, with the timing of those adjustments likely to drive near-term volatility.
USDMXN.FOREX · Monetary · Neutral Rabobank expects USD/MXN to hold 17-18 as Fed and Banxico rate expectations get repriced, a monetary-policy-driven FX outlook.
Sanword Securities' Chen expects Mexican peso-yen to hold in 8.9-9.3 range this week
Chen of Sanword Securities said the Mexican peso against the yen is likely to trade in a holding pattern this week, setting an expected range of 8.9 to 9.3 yen. He cited Bank of Mexico Deputy Governor Heath's remarks that short-term additional rate cuts are not warranted and that easing measures may come about a year from now, saying expectations that a rate cut will be skipped are a strong supporting factor. On the 8th, Mexico's Finance Ministry, in a draft budget submitted to Congress, forecast economic growth of 1.5% to 2.5% for 2027 and projected that the broad public sector deficit would narrow to 3.9% of gross domestic product from an estimated 4.1% for the previous year. It also revised down its 2026 growth forecast to 1.0% to 2.0% from an initial 1.8% to 2.8%. Chen said maintaining USMCA will likely be the top priority for Mexico under the Sheinbaum administration, and while headlines over tariffs and measures against transshipment in trade talks with the United States could trigger temporary risk-off peso selling, the fundamental structure of North American supply chains will be maintained, so it is unlikely to lead to fatal peso selling.
USDMXN.FOREX · Monetary · Negative BoM Deputy Governor Heath's remarks that near-term rate cuts are not warranted support the peso, and Mexico's fiscal/budget outlook is discussed.
Peso Strengthens as Mexico-US Trade Talks Progress
The Mexican Peso has strengthened against the US Dollar, with USD/MXN falling back below 17.00, as Mexican officials engage with US counterparts on trade issues following a widening US-Canada rift. Societe Generale reports that the currency's gains are supported by these diplomatic efforts, alongside a sharp drop in Mexico's car imports from China after tariff adjustments aimed at protecting local jobs.
Mexico's central bank deputy governor signals no immediate further rate cuts
Mexico's central bank deputy governor, Heath, indicated that the bank should not cut rates again in the short term, and that additional easing could come about a year later. This highlights policymakers' cautious stance even as inflation approaches its target. In an interview released on Banorte's podcast, Heath said, "I think it's appropriate to pause under current circumstances." He added that if inflation, supported by core inflation, gets very close to the bank's 3% target, there would then be room to consider lowering rates a bit more, and that could be about a year from now. He warned that the decline in headline inflation is mainly due to volatile non-core items that are less responsive to monetary policy, and it is too early to declare victory. He also suggested that if inflation reignites, progress stalls, or the external environment, including the Federal Reserve's actions, complicates the outlook, the bank could be forced to reassess its stance.
Mexican Peso Strengthens as USD/MXN Breaks Below 17
Rabobank analysts Christian Lawrence and Molly Schwartz report that USD/MXN has fallen below 17 for the first time since May 2024, prompting the bank to revise its forecast to 16.5 in the coming weeks. The peso's strength is attributed to carry trade dynamics, which continue to support the currency against the US dollar.
MUFG analysts Derek Halpenny and Abdul-Ahad Lockhart say the Mexican Peso continues to benefit from low FX volatility and strong carry demand, with USD/MXN breaking below 17.00 for the first time since June 2024. They warn that the peso's carry appeal faces crowding risk.
USDMXN.FOREX · Monetary · Neutral MUFG notes peso's carry appeal faces crowding risk, implying potential for MXN weakness or volatility, but no clear directional signal for either currency.
Mexican Peso hits five-month high on weak US jobs data
The Mexican Peso surged to a five-month high against the US Dollar on Friday, driven by a weaker-than-expected US jobs report. The disappointing data fueled speculation that the Federal Reserve may hold off on raising interest rates in 2026, weakening the Greenback and boosting risk appetite. The Peso capitalized on the improved market sentiment to extend its gains.
Banxico holds rate at 6.50%, Rabobank sees support for MXN carry
Rabobank analysts Molly Schwartz and Christian Lawrence note that Mexico's central bank, Banxico, unanimously kept the overnight policy rate at 6.50% on August 6 and continues to judge the stance as appropriate, supporting the Mexican peso carry trade.
Bank of Mexico Holds Rates Steady for Second Straight Meeting, Pushes Back Inflation Target Timeline
The Bank of Mexico decided unanimously at its monetary policy meeting on the 6th to hold the policy rate at 6.50 percent. This marks the second consecutive hold, in line with market expectations. In its statement, the central bank pushed back the expected timing for inflation to converge to the 3 percent target to the fourth quarter of 2027, from its previous forecast of the second quarter of the same year. It noted that risks to the inflation outlook are tilted to the upside, amid persistently high core inflation, trade policy disruptions, and peso depreciation risks. An economist at Capital Economics said the statement was slightly more hawkish than the previous one, and that a rate hike by year-end is possible.
Mexican Peso rallies to one-month high on Hormuz deal speculation
The Mexican Peso surged to a one-month high on Tuesday amid speculation that US-Iran talks could reopen the Strait of Hormuz, easing global inflationary pressures by freeing ship traffic. At the time of writing, the USD/MXN pair traded at 17.26, after reaching a high of 17.33.
Mexican Peso tumbles as Gulf War escalation weighs on mood, Fed eyed
The Mexican Peso lost ground against the US Dollar on Wednesday as risk appetite turned sour amid the escalation of the Gulf War, while traders awaited the Federal Reserve’s monetary policy decision. The USD/MXN traded at 17.51, up 0.47%.
USDMXN.FOREX · Geopolitics · Positive Gulf War escalation weakens risk appetite, hurting the Mexican Peso (quote) and strengthening the US Dollar (base).
Commerzbank sees slightly stronger Mexican peso outlook
Commerzbank strategist Michael Pfister argues that Banxico’s recent rate cuts were broadly justified by moderating inflation and Mexico’s weakening economy, leaving little reason for the central bank to tighten policy despite markets pricing in roughly three rate hikes.
Mexican Peso to Yen Likely to Stay Firm on Growth Expectations Exceeding IMF Forecasts
Mr. Chen of Sanward Securities indicated that the Mexican peso is likely to remain firm against the yen, as economic growth is expected to surpass the latest IMF forecasts. Mexico's Finance Minister Amador stated that growth will exceed the IMF's downward revision of the 2026 GDP growth outlook to 1.2 percent. He also noted that the June CPI came in at 3.37 percent year-on-year, staying below the policy target ceiling of 4.0 percent for a second consecutive month, and that the Bank of Mexico has no plans to cut rates for the time being, making it easier for peso buying and yen selling to continue from an interest rate perspective. He expects this week's range to be 9.20 to 9.50 yen.
Mexican Peso Gains 0.66% as Risk Appetite Improves
The Mexican Peso gained ground versus the Greenback on Monday, up by 0.66% as risk appetite improved despite escalating tensions in the Middle East. At the time of writing, the USD/MXN trades at 17.43 after hitting a daily high of 17.55.
Mexican Peso surges as US inflation data weighs on the Dollar
The Mexican Peso appreciated against the US Dollar during the North American session, rising 0.29% after the latest US inflation reports eased expectations that the Federal Reserve would raise rates to tackle high inflation. At the time of writing, the USD/MXN trades at 17.38.
Mexican Peso-Yen Expected to Trade in 9.05–9.35 Yen Range This Week
Sanward Securities' Mr. Chen expects the Mexican peso-yen to trade in a rangebound manner due to a lack of catalysts, forecasting a range of 9.05 to 9.35 yen this week. While the June US employment data came in below expectations and pushed back the outlook for Federal Reserve rate cuts, the Bank of Mexico is seen as having ended its rate-cutting cycle, keeping its policy rate unchanged at 6.50%. The consumer price index for the first half of May rose 4.11% year-on-year, showing a slowdown, and many in the market see no change in rates this year. Additionally, the Trump administration did not agree to extend the United States–Mexico–Canada Agreement, which will remain in force for the next ten years, though this is subject to change if the three countries agree on amendments. Finance Minister Amador noted that the International Monetary Fund's downward revision of the 2026 GDP growth forecast to 1.2% was due to a broader downgrade of global economic prospects rather than domestic factors, and argued that the 2025 outcome was close to the government's forecast.
Mexican Peso gains as risk appetite improves, weighs on USD
The Mexican Peso registered solid gains of over 0.22% against the US Dollar on Thursday as risk appetite improved after two days of hostilities between the US and Iran ended, despite US President Donald Trump's warning that the deal might be “over.” The USD/MXN pair traded at 17.54.
High real yields underpin Mexican Peso demand despite Moody’s downgrade, says Rabobank
Rabobank strategists Christian Lawrence and Molly Schwartz note that high real yields continue to underpin demand for the Mexican Peso, even after Moody’s downgraded Mexico’s rating to Baa3. They observe that 10-year MBono yields have fallen and that markets remain relaxed about Mexico’s investment-grade status.
Mexican Peso rises on soft US jobs data, intervention speculation
The Mexican Peso advanced against the US Dollar, with USD/MXN trading at 17.48, down 0.43%. The move was driven by a weaker-than-expected US jobs report that weighed on the greenback, alongside speculation of intervention in foreign exchange markets by Japanese authorities.
Policy uncertainty caps nearshoring upside for Mexican Peso, says Societe Generale
Societe Generale's Dev Ashish noted that Mexican Peso price action was relatively muted after the United States-Mexico-Canada Agreement extension decision, indicating investors largely expected the outcome.
The Mexican Peso lost ground against the US Dollar on Wednesday amid growing speculation about a cancellation of the USMCA free trade agreement signed in 2020, alongside overall US Dollar strength. At the time of writing, the USD/MXN traded at 17.55, up 0.37%.
Societe Generale says Mexican Peso under pressure as Banxico pauses
Societe Generale strategists note that USD/MXN has held key lows near 17.10 and is now trying to break out from a small base formation. Initial resistance is at the 200-day moving average around 17.80, with a recent low at 17.30 acting as support.
