Mexican Peso Hits Five-Month Low

2026-09-25 19:25 By Isabela Couto 1 min. read

The Mexican peso weakened to around 17.7 per US dollar in late September, reaching a five-month low after the Bank of Mexico left its benchmark interest rate unchanged.

Banxico kept its benchmark rate at 6.50% at its September meeting, marking a shift from the Fed’s latest move, when the US central bank raised the cost of credit.

Banxico said in its statement that its future decisions would not necessarily follow those of the Federal Reserve.

The Fed is expected to raise rates in October.

Banxico’s stance could reduce the appeal of peso-denominated assets and the currency for carry-trade operations, as the interest-rate differential would narrow further.

A narrower differential reduces the currency’s buffer against periods of international volatility.

Meanwhile, Mexico’s unemployment rate stood at 3% in August, matching forecasts and only 0.1 percentage point higher than in July.

A tight labor market could boost consumer demand and lead Banxico to adopt a more hawkish stance.



News Stream
Mexican Peso Hits Five-Month Low
The Mexican peso weakened to around 17.7 per US dollar in late September, reaching a five-month low after the Bank of Mexico left its benchmark interest rate unchanged. Banxico kept its benchmark rate at 6.50% at its September meeting, marking a shift from the Fed’s latest move, when the US central bank raised the cost of credit. Banxico said in its statement that its future decisions would not necessarily follow those of the Federal Reserve. The Fed is expected to raise rates in October. Banxico’s stance could reduce the appeal of peso-denominated assets and the currency for carry-trade operations, as the interest-rate differential would narrow further. A narrower differential reduces the currency’s buffer against periods of international volatility. Meanwhile, Mexico’s unemployment rate stood at 3% in August, matching forecasts and only 0.1 percentage point higher than in July. A tight labor market could boost consumer demand and lead Banxico to adopt a more hawkish stance.
2026-09-25
Mexican Peso Weakens After Fed Rate Hike
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Mexican Peso Holds Near 2-Year High
The Mexican peso strengthened to near 16.98 per US dollar, remaining close to the more than two-year high of 16.91 touched on September 4th, as Mexico’s industrial production rose 2.7% yearly in July 2026, the highest level since April 2024 and above expectations of a 1.8% gain. Gross fixed investment also rose 7.7% in June, beating expectations for a 4.8% increase. In its latest decision to keep the key interest rate unchanged at 6.50%, Banxico highlighted that the economy rebounded in 2Q26. This could support a more hawkish stance and attract higher foreign capital inflows through exports. Meanwhile, the dollar found support on expectations that the Federal Reserve could raise interest rates in September. Core US CPI increased slightly more than expected from the previous month, while headline inflation remained elevated amid higher energy costs. A Fed rate hike would narrow the US-Mexico interest-rate differential.
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