Peso Firms As Mexico’s Stock Rally Pauses Just Below Record Highs

USD/MXN was trading around 18.35–18.36 on Thursday morning, almost exactly where it ended Wednesday after a narrow overnight range.

The peso had already gained about 0.2% in the previous session, closing near 18.34 per dollar as investors kept selling the greenback on growing conviction that the Federal Reserve will cut rates in December.

The dollar index has slipped to just under 99.5, down from above 100 earlier in the week, with futures now assigning well over an eighty-percent chance to a December cut.

That global move meets Mexico’s still-high real yields. Banxico’s policy rate stands at 7.25%, and the bank has cut its 2025 growth forecast to around 0.3% after a 0.29% contraction in the third quarter, yet it signals only gradual easing.

Combined with resilient exports and nearshoring flows, the mix still favours the peso for investors who prefer orthodox policy over experiments in deficit spending.

Technically, USD/MXN remains in a clear longer-term downtrend from levels above 19.50 at the start of the year. Daily charts show consolidation between roughly 18.30 and 18.55, while four-hour candles point to mild further peso strength but with momentum fading near short-term support around 18.32.

A clean break below that area would reopen the path toward this year’s lows, whereas a bounce above 18.50 would hint at a corrective dollar recovery.

Equities are sending a similar, cautious message. The S&P/BMV IPC edged up 0.04% on Wednesday to 63,242.71 points, its fourth straight gain and still close to record territory around 64,400.

Turnover reached about 174 million shares, worth roughly 13.6 billion pesos, with 445 stocks rising, 221 falling and 32 unchanged.

Banco Base economist Gabriela Siller tied the modest advance to the prospect of a Fed cut, while Actinver’s Enrique Covarrubias noted that the move leaves the index up about 0.7% in November and roughly 27.7% so far this year.

The main Mexico equity ETF in New York, EWW, was broadly flat, suggesting no big foreign inflows or outflows. Five of the day’s strongest performers were infrastructure group IDEAL, rail operator Grupo México Transportes, homebuilder Consorcio Ara, miner Industrias Peñoles and low-cost airline Volaris.

The biggest losers were insurer Qualitas, food producer Grupo Bimbo, Bolsa Mexicana de Valores, conglomerate Grupo Carso and tequila maker Becle.

For now, foreign money still favours Mexico’s disciplined macro stance, high real yields and nearshoring story. But with growth weakening and the IPC hovering near peaks, investors know that any heavy-handed state intervention or fiscal overreach could quickly test that confidence—and the peso’s current calm.

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