Mexican Peso Gains 0.3% to 18.13 per Dollar on Monday
MARKETS · MEXICO
Key Facts
- —The country Mexico’s exports to the United States are still growing at double-digit rates and two-way trade is nearing US$900 billion a year (Mexico Informa, 3 October). The peso moves with US rates and trade policy.
- —Why it matters Since the US Federal Reserve raised rates on 16 September, the peso has lost 5.92 percent, from 17.1482 to 18.1637 per dollar, on Banco de México data cited by El Economista.
- —Why now Weak US jobs data cooled bets on another Fed hike, and the dollar fell 4.6 percent against Brazil’s real on Monday after Brazil’s first-round election (Banco Central do Brasil PTAX rate).
- —What happened On Monday 5 October Banxico set the official FIX at 18.1343 pesos per dollar, a gain of about 0.3 percent for the peso from Friday’s 18.1903.
- —The numbers Banxico’s FIX stood at 17.7100 on 25 September, peaked at 18.3688 on 1 October and eased to 18.1343 on 5 October.
- —What it means for you A dollar sent to Mexico buys about 2.4 percent more pesos than on 25 September. US buyers of Mexican goods and holidays pay a little less; US investors holding pesos lose.
- —Still open Where the peso closes on Monday; Fed minutes due on Wednesday 7 October; and the date of the fourth US-Mexico round of the USMCA review.
- —Prediction markets Polymarket gives the Bank of Mexico a 95% chance of holding its rate in November; a 25-basis-point hike stands at 3.8% (5 October, 2:04 p.m. ET).
The Mexican peso firmed against the US dollar on Monday 5 October as Brazil’s real rallied and the dollar eased. Banco de México (Banxico), the central bank, set its official FIX rate at 18.1343 pesos per dollar at midday in Mexico City. For Americans, a dollar sent south buys slightly fewer pesos than on Friday but still more than on 25 September.
The FIX was about 0.3 percent stronger for the peso than Friday’s 18.1903 and well off the 18.3688 low of 1 October. US importers and visitors find Mexico slightly cheaper than a fortnight ago.
The bounce follows a rough September. The Federal Reserve raised its benchmark rate by 25 basis points on 16 September. The Mexican peso then fell 5.92 percent, on Banco de México data cited by El Economista.
Over that period the currency went from 17.1482 to 18.1637 per dollar. It was the most depreciated currency against the dollar in the paper’s comparison since the Fed decision, El Economista reported on Sunday.
Why the Peso Slid in September
The main driver was the narrowing gap between interest rates in the two countries. Banxico has cut its rate from 11.25 to 6.50 percent over two years. The Fed now targets 3.75 to 4 percent.
That leaves a spread of 2.5 percentage points, the smallest since 2007, said Enrique Covarrubias, head of analysis at the brokerage Actinver. In 2023 the gap was 6.25 points, which had made the peso a favourite carry trade.
Covarrubias described about 90 percent of the slide as a technical correction rather than a sign of economic weakness. He said the peso had looked expensive in late August and that his model puts fair value near 18.00 per dollar.
Speculators agreed that the trade had run its course. Long positions on the peso at the Chicago Mercantile Exchange fell 30.3 percent in a week, to 52,400 contracts. That was the lowest since July 2025, as Mexican Peso Falls 4% as Speculators Cut Long Bets reported.
The official fixing tracked the pressure closely. Banxico’s FIX rose from 17.7100 on 25 September to 18.3688 on 1 October. That day the currency touched its weakest level since December 2025, before easing to 18.1903 on Friday and 18.1343 on Monday.
Brazil’s Real Gives Monday a Lift
Part of Monday’s gain came from Brazil after Sunday’s first round of its presidential election. Banco Central do Brasil’s PTAX reference rate fell to 4.9859 reais per dollar on Monday, from 5.2238 on Friday.
That is a 4.6 percent drop for the dollar against the real. Investors often trade the two Latin American currencies together, so a sharp move in one tends to pull the other.
The dollar itself was softer after US jobs data showed a sharper slowdown than expected. Felipe Mendoza, a market analyst at EBC Financial Group, said in analysis cited by Publimetro that the data cut expectations of another Fed hike.
Mendoza still flagged risks from the Middle East and energy markets. Analysts at Banorte, a Mexican bank, expect the peso to end 2026 at 17.30 per dollar, stronger than today, El Economista reported.
Where the USMCA Review Stands
No new step on the United States-Mexico-Canada Agreement (USMCA) review or on US tariffs on Mexico had been announced by Monday morning. The process remains in a slow middle phase.
At the joint review on 1 July, Washington declined to extend the pact automatically for 16 years. US Trade Representative Jamieson Greer proposed annual reviews instead, and without a deal the agreement would expire in 2036.
Three bilateral rounds have taken place, the third in Mexico City in July. A fourth was planned for 28 September but slipped. Deputy Trade Minister Luis Rosendo Gutiérrez said in late September it would more likely come in October.
Economy Minister Marcelo Ebrard, Mexico’s lead USMCA negotiator, met Greer for an hour at the G20 trade ministers’ meeting in Milwaukee last week. “Every day we are closer to reaching new agreements,” he told reporters on Thursday, Mexico Informa reported. See G20 Trade Ministers Meet in the US as Mexico’s Ebrard Talks With Washington and the EU for that meeting.
Mexico’s priority is to lower the Section 232 tariffs on cars, steel, aluminium and copper. It also wants to keep tariff-free treatment for goods that meet USMCA rules of origin.
What It Means for You
For US families sending money to Mexico, a dollar still buys about 2.4 percent more pesos than on 25 September. Travellers and buyers of Mexican goods get a similar small discount.
For US investors, the narrower rate gap makes holding pesos less rewarding than in 2023, when it was 6.25 points. Companies in USMCA supply chains, from carmakers to steel and copper firms, remain exposed to Section 232 tariffs.
What Is Not Known
Monday’s FIX is a midday reference, and the market close comes later. Currency gains made in the morning often fade by the afternoon.
Minutes from the Fed’s last meeting, due on Wednesday 7 October, could revive talk of another US hike. That would squeeze the rate gap with Mexico further.
The date of the fourth USMCA round has not been announced. Nor is it known whether Washington will ease the Section 232 tariffs, Mexico’s main demand.
What Prediction Markets Say
On Polymarket’s “Bank of Mexico Decision in November?” market, bets priced a 95% chance of no change at 2:04 p.m. ET on 5 October. A 25-basis-point hike stood at 3.8% and a 25-basis-point cut at 2%.
About US$37,000 has been traded on the market in total, most of it on the no-change outcome. Prices barely moved over the past day.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
What is the Banxico FIX rate?
It is the official peso-dollar reference rate that Banco de México sets each business day from an average of wholesale market quotes. It is published from 12:00 Mexico City time and used to settle dollar obligations in Mexico.
Why did the Mexican peso weaken in September?
Mainly because the gap between Mexican and US interest rates shrank to 2.5 percentage points. That followed the Fed’s rate rise on 16 September. Analysts at Actinver describe most of the fall as a correction from an expensive level.
Is the USMCA still in force?
Yes. The United States declined an automatic 16-year extension on 1 July and proposed annual reviews. The agreement stays in force while talks continue and would only lapse in 2036 without a deal.
More: Mexico news in English, every day from The Rio Times.
Sources: Banco de México, FIX exchange rate table, FIX of 5 October 2026; El Economista, 4 October 2026; Publimetro México, 5 October 2026; Marca México, 5 October 2026; Banco Central do Brasil, PTAX rate, 5 October 2026; Milenio, 1 July 2026; T21, 24 September 2026; Mexico Informa, 3 October 2026; Polymarket market prices, 5 October 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief