The Mexican peso has appreciated 13.6% against the dollar in 2025. The Mexican currency closed 2024 with a value of 20.87 per dollar. On Thursday, December 11, it was at 18.03 pesos per dollar. This appreciation is one of the biggest surprises of 2025. Comparable, perhaps, with the increase in Mexican exports to the United States. Between January and September they increased 5.5% and reached 399,473 million dollars. In the same period, Mexico registers a surplus against the United States of 145,866 million dollars, 16.2% higher than in 2024.
Are the exporters the Mexican team that does score goals? The metaphor is valid on the eve of the Soccer World Cup. In a challenging year, they responded by breaking records. These are sales of 44,333 million dollars per month on average, despite the protectionism of the administration led by Donald Trump and the appreciation of the peso in a context of global weakness of the dollar.
Spectacular. The behavior of Mexican exporters has been spectacular. Working with a peso appreciation of more than 13% is equivalent to having a tariff that makes your products more expensive by that proportion. It’s like playing with one less player from minute 15 of the first half. For exporters, the appreciation of the exchange rate is not good news, but rather a burden to bear, but they knew how to maneuver in a context in which there were also changes in the rules of the game and tariffs for some products, such as steel, aluminum, sugar and tomatoes.
What’s next? The peso would close at 18.58 in 2025 and reach 19.06 in 2026, according to the average projections of experts surveyed by Citi and published on December 5. There are no guarantees that this will be the case. For now, we are at 03/18 and changes are coming to the Federal Reserve in 2026, including the departure of President Jerome Powell.
Donald Trump wants the Fed to deliver much lower interest rates, despite inflationary pressures. Most likely next year I will get it. This could generate conditions for a greater depreciation of the dollar, compared to other currencies in the world.
The weakness of the US currency is one of the news of 2025. To explain it, we have a river of arguments that point to the reaction of investors to the decisions and statements of Donald Trump: his insults to Jay Powell and his eagerness to weaken the position of the head of the Fed; the US fiscal deficit and the apparent lack of understanding in the White House of the inflationary impact of some of its measures, including tariffs and other protectionist measures.
Less attention has been given to the weak dollar doctrine. This claims that, in reality, the dollar was very strong at the time of Donald Trump’s return to the Presidency. This relative strength made US companies uncompetitive, in the US market and in world markets.
Stephen Miran is the main ideologue in favor of the weak dollar. He has been president of Donald Trump’s Council of Economic Advisers and is now one of the governors of the Federal Reserve. He advocates further cuts in interest rates and is in favor of reducing the margin of independence of the Fed. To weaken the dollar, in addition to rate movements, he proposes the sale of a part of the gold reserves and investments in other currencies.
Having a cheaper dollar is a way to compete with China, a way to transfer the battle for global economic hegemony to the monetary field. Miran and other economists close to Trump draw attention to the depreciation of the Yuan since 2015 and the role this has played in the advancement of China’s products and services in various markets.
Powell’s term at the head of the Fed ends in May and there is a good chance that the next head will be Kevin Hassett, an economist who is in tune with the concepts of Stephen Miran. We will have a Federal Reserve pushing for lower rates and a weaker dollar. The Fed’s reference rate is at 3.5-3.75 and Trump wants it at 2%, even though inflation is at 3 percent.
What will happen to the Mexican peso? Stephen Miran and his weak dollar doctrine will bring pressure to maintain the exchange rate at levels close to the current one. On the other hand, we have a year that looks complicated for the Mexican economy and public finances. The value of the peso will also depend on factors such as the renegotiation of the T-MEC, the situation of Pemex, the decisions of the Bank of Mexico and the management of the budget deficit by the Treasury. Place your bets, below 18 or above 20 per dollar?
