Dollar Weakens Again As Peso Firms And Mexican Blue-Chips Extend Their Rally

The Mexican currency is firming as global investors rotate back into high-yielding emerging markets on the back of a softer dollar and growing confidence in a December Fed rate cut.

Early Wednesday the dollar buys about 18.38 pesos, stronger than Tuesday’s 18.49 close but still inside the 18.20–18.60 band that has contained trading this month while the Dollar Index hovers just below the 100 mark.

Soft US data and lower Treasury yields reinforce the sense that US monetary policy is at a turning point. Futures now price a cut next month with well over 80 percent probability, pushing investors toward markets that still offer real yield.

Mexico fits that profile: Banxico’s benchmark rate stands at 7.25 percent, inflation has surprised slightly to the upside, and growth forecasts around 0.5 percent for 2025 keep pressure on policymakers to avoid the kind of adventurous spending favoured by the Mexican left.

On the charts, the trend is intact but less dramatic. Weekly dollar–peso candles still slope gently lower from the 19–20 area, yet momentum has flattened.

Daily and four-hour views show a sideways market oscillating around its moving averages, with nearby support at 18.30 and 18.20 and resistance at 18.45–18.60.

That configuration points to consolidation rather than a fresh break in either direction unless US data or Banxico guidance spring a surprise.

Equities are reflecting the same cautious optimism. The S&P/BMV IPC rose 1.1 percent on Tuesday to about 63,215 points, not far from its record.

Top winners included Volaris, Qualitas, Cemex, Grupo Mexico and Genomma Lab, all boosted by the global risk-on tone and by Mexico’s nearshoring story.

On the other side, Orbia, Coca-Cola Femsa, La Comer, Vesta and Femsa slipped as investors rotated out of more defensive or richly valued names.

In New York, the Mexico-focused EWW ETF trades near 52-week highs, with strong inflows over the past year offset by modest outflows in recent weeks as some investors lock in gains.

For now, Mexico sits near the top of emerging-market league tables for conservative policy and credible central-bank communication. The risk is that sluggish growth and recurrent calls for heavier state intervention eventually test investors’ patience.

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