Mexican Peso Approaches 11-Month Low

2026-10-16 16:28 By Isabela Couto 1 min. read

The Mexican peso weakened to around 18.47 per US dollar in October, testing the lowest in 11 months, as the narrowing interest-rate differential between Mexico and the US reduced the pes’s appeal.

In the US, annual producer price inflation reached 6.3%, while consumer price inflation rose to 3.7%, reinforcing expectations that the Federal Reserve will hike rates this year.

Meanwhile, minutes from Banxico’s latest monetary policy meeting showed that most members of the Governing Board believe moderating core inflation and weak domestic consumption provide room to continue easing monetary policy into late 2026 and early 2027.

Expectations of a narrower interest-rate differential have boosted demand for the dollar by reducing the expected inflow of capital into Mexico as Mexican yields become less attractive to foreign investors.

On the other hand, expectations of record exports in 2026, driven by artificial intelligence and industrial relocation, are providing some support for the peso.



News Stream
Mexican Peso Approaches 11-Month Low
The Mexican peso weakened to around 18.47 per US dollar in October, testing the lowest in 11 months, as the narrowing interest-rate differential between Mexico and the US reduced the pes’s appeal. In the US, annual producer price inflation reached 6.3%, while consumer price inflation rose to 3.7%, reinforcing expectations that the Federal Reserve will hike rates this year. Meanwhile, minutes from Banxico’s latest monetary policy meeting showed that most members of the Governing Board believe moderating core inflation and weak domestic consumption provide room to continue easing monetary policy into late 2026 and early 2027. Expectations of a narrower interest-rate differential have boosted demand for the dollar by reducing the expected inflow of capital into Mexico as Mexican yields become less attractive to foreign investors. On the other hand, expectations of record exports in 2026, driven by artificial intelligence and industrial relocation, are providing some support for the peso.
2026-10-16
Mexican Peso Weakens Toward One-Year Low
The Mexican peso weakened to around 18.44 per US dollar in October, nearing a one-year low after the release of the Bank of Mexico’s meeting minutes. The currency became one of the worst performers among emerging markets as the minutes left open the possibility of further interest-rate cuts. Most members of the Governing Board said moderating core inflation and weak domestic consumption provide room to continue easing monetary policy into late 2026 and early 2027. Expectations of a narrowing interest-rate differential between Mexico and the US reduced the peso’s appeal in carry trades, boosting demand for dollars in the spot market. Meanwhile, annual inflation rose to 3.45% in September from 3.26% in August. Although slightly below market expectations, the reading added uncertainty to the domestic monetary policy outlook.
2026-10-09
Mexican Peso Weakens Toward One-Year Low
The Mexican peso weakened to around 18.4 per US dollar in October, nearing a one-year low and tracking gains by the US currency against other emerging-market currencies. The dollar strengthened amid expectations of further Fed tightening, as elevated inflationary pressures stemming from the Middle East situation coincided with resilient US economic performance. The narrowing interest-rate differential is also undermining the appeal of the Mexican currency. Narrower yield spreads between Mexico and developed economies, combined with expectations that Banxico will keep monetary policy stable, are reducing the incentive for peso carry-trade strategies.
2026-10-01