The Mexican peso closed with an appreciation against the dollar on Tuesday, its lowest level since the end of May 2024, given a general weakness of the US currency, as well as the attractiveness of carry trade, commercial resilience and diversification.
The dollar continues to weaken against most currencies as global investors flock to precious metals. According to data from Bank of Mexico (Banxico), the national currency ended the session at 17.2420 pesos per dollar, an appreciation of 0.74% or 12.78 cents.
In electronic operations after the official closing, the peso appreciated 0.38% at 7:30 p.m., central Mexico time, trading at 17.1769 units per dollar. With this result, the national currency recorded its best close since April 24, 2024, when it stood at 17.2136 pesos, before the electoral process in Mexico.
So far in January, the Mexican peso has appreciated 4.25 percent.
In comparison with other currencies, the most appreciated were the Norwegian crown with 1.96%, the Swiss franc with 1.94%, the Brazilian real with 1.89%, the Swedish crown with 1.78% and the Hungarian forint with 1.74 percent.
The only currencies that depreciated are the Argentine peso with 0.33%, the Turkish lira with 0.06%, the Hong Kong dollar with 0.03% and the Chinese yuan with 0.01 percent.
Diego Albuja, Market Analyst at ATFX LATAM, assured that “the closure responds mainly to a lower appetite for the dollar as a safe haven asset and market expectations about a less restrictive monetary policy in the United States. This has generated sales of the dollar and flows towards currencies with better relative performance, such as the Mexican peso.”
He added that this behavior suggests that the exchange rate could remain under downward pressure in the short term, seeking levels close to 17.20 pesos, “as long as no negative surprises appear from the external front. This benefits those who have commitments in dollars, although it limits the attractiveness of maintaining long positions in the dollar against the peso.”
For Gabriela Siller, Director of Analysis for Banco Base, the appreciation of the peso occurs due to a weakening of the dollar according to its weighted index. “Towards the close, the dollar reached its lowest in the session, not seen since February 23, 2022, after Donald Trump said that the dollar has not weakened that much and that he is not worried about its fall.”
The expert highlighted that the dollar would continue to be under downward pressure in the following sessions, because the policies of the current United States administration have eroded confidence and credibility in said economy.
“In addition, Donald Trump’s nominee to chair the Fed is expected to act in line with his interests, which would mean a loss of autonomy,” he explained.
Dollar at its worst level since 2022
The Dollar Index (DXY), a measure of the value of the US dollar compared to a “basket” of the world’s six major currencies, hit its worst level in almost three years. The DXY index ended at 96.22 points, which implied its lowest level since February 23, 2022, when it stood at 96.19 points, dragged down by the diversification of investments towards assets outside the dollar.
Analysts at Monex Casa de Bolsa stated that “the possible exchange rate intervention, coordinated between Tokyo and Washington, prompted the closing of carry trade positions and put pressure on the dollar due to the massive sale of Treasury bonds.” They added that uncertainty about US fiscal sustainability and the proximity to the January 30 deadline to avoid a government shutdown eroded confidence in the currency.
In 2026, positive inertia persists in Latin America, with the Brazilian real appreciating 5.7%, the Chilean peso 4.8% and the Mexican peso 4.25% leading gains within the bloc. “This behavior reinforces the attractiveness of the carry trade as the engine of appreciation, in a context where in the futures market, CME, two 25 bp cuts by the Fed for 2026 are discounted,” according to Monex.
