Yesterday, the Mexican peso reached its highest exchange rate compared to the US dollar since the end of July 2023
This surge comes as the US currency weakens and oil prices soar, say experts and Mexico’s central bank, Banxico.
The peso’s closing rate hit 16.6759 per dollar, marking its best performance since July 28 last year, as per Banxico’s data.
In yesterday’s trading, the peso moved between 16.6640 and 16.7590 per dollar.
Experts link this gain to the falling dollar and rising oil prices, benefiting emerging markets and oil-rich nations.
She also sees long-term growth prospects from nearshoring and expects Banxico to maintain tight monetary policy.
Meanwhile, Grupo Financiero Monex predicts the peso might hover around 16.68 pesos, awaiting US economic indicators that could influence the Federal Reserve’s rate decisions.
This scenario underscores the interconnectedness of global financial policies and commodity markets, highlighting the peso’s resilience amid shifting economic tides.
Background
The peso’s resilience is part of a broader trend where emerging market currencies benefit from global economic shifts.
Historically, the peso has reacted sensitively to changes in the US economic policy and global oil prices.
The recent strength of the peso underscores Mexico’s growing economic stability and the success of its monetary policies.
This stability is crucial for attracting foreign investment and supporting Mexico’s economic growth.
Nearshoring, the practice of transferring business operations to nearby countries, has particularly bolstered Mexico’s economic prospects.
As companies seek to shorten supply chains and reduce costs, Mexico’s proximity to the US market makes it an attractive destination.
This shift is expected to continue supporting the peso and Mexico’s broader economy in the coming years.