Mexican Peso Rebounds

2026-02-02 15:54 By Felipe Alarcon 1 min. read

The Mexican peso rebounded toward the 17.40 per US dollar level after three consecutive sessions of declines, largely reflecting a near-term correction following last week’s sharp selloff driven by a broad resurgence in the US dollar.

The earlier drop was triggered by renewed USD strength after the nomination of Kevin Warsh as the next Federal Reserve chair and stronger US data lifted US yields and raised the opportunity cost of holding peso positions, prompting an unwinding of crowded carry trades.

Domestically, the pullback was reinforced by evidence that Mexico’s growth momentum remains modest despite a Q4 rebound, cementing expectations that Banco de México will maintain a cautious easing path after cutting the policy rate to 7% in December, gradually narrowing the real yield differential that had underpinned the “superpeso.” Heavy profit-taking after January’s sharp appreciation further amplified the move.



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