The US dollar closed at 17.45 pesos, marking a 0.97% change from the previous session’s 17.29 pesos. While the dollar has seen a 1.65% rise in the last week, it has dropped 2.91% over the past year. It ended a two-day flat trend, showing higher volatility in the last seven days compared to the past year.
Bloomberg suggests that the peso’s appreciation is tied to economic indicators in the United States, pointing towards a potential interest rate cut by the Federal Reserve. The Mexican peso has been on a winning streak against the dollar since mid-2022, reaching its best levels since 2016. The “super peso” is largely attributed to the Bank of Mexico’s decisions regarding reference rates and the country’s stability in public finances and remittances.
The strength of the Mexican peso is seen as good news, favoring a reduction in external debt contracted in dollars. Financial analysts warn that the “super peso” streak could end in 2023, as the United States Federal Reserve looks to increase interest rates while Banxico seeks to maintain them, possibly leading the currency back to 19 units per dollar.
The Mexican peso is the first currency in the world to use the $ sign and coins are semicircular with the national coat of arms on the reverse. Additionally, the peso gave a big surprise at the end of 2022, becoming the second most appreciated currency against the dollar, with a 4.87% appreciation for the year.