The Mexican peso enjoyed a strong close to the day, maintaining its positive trend and ending the April 21 session trading higher against the dollar. The US dollar lost ground against the Mexican currency at the close of trading on Monday.
The US dollar traded at an average of 19.72 Mexican pesos at market close, representing a 0.09% change compared to the previous session’s closing price of 19.74 pesos.
However, throughout the day, the dollar traded at 19.59 pesos per unit, its lowest price so far this year.
The depreciation comes amid threats by US President Donald Trump to remove Federal Reserve Chairman Jerome Powell. Trump has pressured the Fed to accelerate its interest rate cut cycle, as the current monetary policy narrative interferes with his tariff plans, according to a financial analysis by Monex.
Over the past week, there have been multiple comments about Trump’s intentions to intervene in the Fed’s independence and dismiss Powell before the end of his term.
Regarding the performance over the last seven days, the US dollar has fallen 1.83%; however, year-on-year, it still has a rise of 18.34%.
Regarding today’s changes compared to previous days, the tables turned compared to the previous day, where it posted a 1.13% increase, recently showing a lack of stability in the results. The volatility figure was noticeably lower than the accumulated value over the last year, so its price has been experiencing fewer fluctuations than expected in recent days.
Economic Forecasts for 2025
The peso-dollar relationship during 2024 was marked by contrasts. The year began with the Mexican currency strengthening against the US dollar. The greenback reached 16 pesos per unit, something that hadn’t happened in almost a decade. The nickname “superpeso” remained more enduring than ever.
However, as the peso advanced, it depreciated mainly due to political decisions, such as the controversial Judicial Reform and the elimination of autonomous bodies.
The decline of the Mexican currency worsened with Donald Trump’s campaign, his electoral victory as president of the United States, and his threats to impose tariffs on all Mexican—and Canadian—products if Mexico did not improve border security.
Thus, the dollar returned to 20 pesos, well above the Bank of Mexico’s (Banxico) forecasts.
By 2025, Banxico expects the dollar to average between 20.24 and 20.69 pesos, a conservative forecast considering the repercussions that Trump’s statements and policies in the White House would have on the exchange rate.
Inflation was relatively stable in 2024, hovering around 4%, except for June when it nearly reached 6%, according to data from the National Institute of Statistics and Geography (INEGI).
This year, Banxico forecasts that inflation will fall below four percentage points, reaching 3.8%.
Regarding Gross Domestic Product (GDP) growth, the low forecasts remain. The central bank expects GDP growth of just 1.2%.
What is the Mexican peso?
The Mexican peso is Mexico’s legal tender and the first currency in the world to use the $ symbol, which was later adopted by the United States for the dollar.
This currency is the fifteenth most traded currency in the world, as well as the most traded in Latin America and the third on the continent, behind only the US and Canadian dollars.
The abbreviation MXN is currently used to refer to the Mexican peso, but before 1993, the acronym MXP was used.
The coins commonly used in Mexico are semicircular and bear the national emblem on the reverse. One Mexican peso is equivalent to 100 cents. There are coins in denominations of 1, 5, 10, and 20 pesos; while bills are available in denominations of 20, 50, 100, 200, 500, and 1,000 pesos.
Source: infobae
