Mexican Peso Weakens to 7-Week Low

2026-03-06 15:30 By Felipe Alarcon 1 min. read

The Mexican peso weakened past 17.8 per dollar on Tuesday, hitting a seven-week low and was on track for its worst weekly performance since June 2024 as a surprise drop in US non-farm payrolls exacerbated fears of an economic slowdown in Mexico's largest trading partner.

Although the dollar index retreated following the 92K job decline and the rise in the US unemployment rate to 4.4% the peso remained under intense pressure due to a broader flight from riskier emerging market assets.

This vulnerability is compounded by the escalating US-Israeli conflict with Iran which has fueled energy price shocks and raised the risk of a global inflationary recession.

While Mexico's fourth quarter GDP showed some resilience, the combination of a record 6.48 billion dollar trade deficit and sticky core inflation has left the currency without a sufficient buffer.

Investors are now favoring the greenback as geopolitical instability and cooling US demand threaten the outlook for Mexican exports.



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Mexican Peso Weakens to 7-Week Low
The Mexican peso weakened past 17.8 per dollar on Tuesday, hitting a seven-week low and was on track for its worst weekly performance since June 2024 as a surprise drop in US non-farm payrolls exacerbated fears of an economic slowdown in Mexico's largest trading partner. Although the dollar index retreated following the 92K job decline and the rise in the US unemployment rate to 4.4% the peso remained under intense pressure due to a broader flight from riskier emerging market assets. This vulnerability is compounded by the escalating US-Israeli conflict with Iran which has fueled energy price shocks and raised the risk of a global inflationary recession. While Mexico's fourth quarter GDP showed some resilience, the combination of a record 6.48 billion dollar trade deficit and sticky core inflation has left the currency without a sufficient buffer. Investors are now favoring the greenback as geopolitical instability and cooling US demand threaten the outlook for Mexican exports.
2026-03-06
Mexican Peso Tumbles to 6-Week Lows
The Mexican peso weakened toward 17.7 per dollar on Tuesday, hitting a six-week low as a massive trade deficit and energy price shocks left the currency vulnerable to a global shift toward safe-haven assets. The escalation of the US-Iran conflict and the effectively closed Strait of Hormuz have fueled a risk-off surge into the US dollar. Simultaneously, Mexico posted a record 6.48 billion dollar trade deficit in January, driven by a 33.5% collapse in oil exports and a sharp 9% drop in automotive shipments to the US. While Q4 GDP was revised up to 0.9%, confirming some resilience at year-end, the 10% global US import tax introduced on February 24 threatens to erase these gains and further hinder Mexico’s exports. Banxico’s decision to hold rates at 7% in February amid sticky 4.52% core inflation has also failed to provide a sufficient buffer against the dollar’s strength.
2026-03-03
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.
2026-03-02