Mexican Peso Weakens to Nearly 1-Month Low

2026-03-02 15:41 By Felipe Alarcon 1 min. read

The Mexican peso weakened toward 17.35 per dollar, its lowest in nearly a month, as a massive escalation in the Middle East drove investors into safe-haven assets.

A "risk-off" wave followed joint US and Israeli strikes on Iran, pushing the US dollar and gold higher while punishing emerging market currencies.

Domestic headwinds added pressure as February data showed Mexico's manufacturing sector remains in its sixth straight month of contraction, with the PMI at 47.1.

Despite a slight recovery in business confidence, firms cited ongoing worries over US tariffs and weak demand from the automotive sector.

Inflation also remains a concern.

While headline inflation eased to 3.79% in January, core inflation stayed sticky at 4.52%.

Consequently, Banxico held interest rates at 7% in February and signaled that the return to its 3% target is now delayed until the second quarter of 2027.

This narrowing yield advantage against a resilient US dollar continues to weigh on the peso.



News Stream
Mexican Peso Weakens to Nearly 1-Month Low
The Mexican peso weakened toward 17.35 per dollar, its lowest in nearly a month, as a massive escalation in the Middle East drove investors into safe-haven assets. A "risk-off" wave followed joint US and Israeli strikes on Iran, pushing the US dollar and gold higher while punishing emerging market currencies. Domestic headwinds added pressure as February data showed Mexico's manufacturing sector remains in its sixth straight month of contraction, with the PMI at 47.1. Despite a slight recovery in business confidence, firms cited ongoing worries over US tariffs and weak demand from the automotive sector. Inflation also remains a concern. While headline inflation eased to 3.79% in January, core inflation stayed sticky at 4.52%. Consequently, Banxico held interest rates at 7% in February and signaled that the return to its 3% target is now delayed until the second quarter of 2027. This narrowing yield advantage against a resilient US dollar continues to weigh on the peso.
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