The Mexican Peso (MXN) has been exhibiting strength recently, buoyed by a combination of external and domestic factors. Analysts note that the U.S. Federal Reserve’s cautious stance on interest rates has contributed to a weaker U.S. dollar, which in turn supports the value of the peso. The Fed's signals of potential interest rate cuts later in 2025 have been pivotal, providing a favorable backdrop for the MXN.
Compounding this positive sentiment, delays in the implementation of a proposed 25% tariff on Mexican imports by the U.S. have allowed the peso to recover from an earlier significant depreciation. This recovery is further fueled by a robust foreign direct investment (FDI) environment, bolstered by nearshoring trends. With FDI surpassing $26 billion in sectors such as automotive, energy, and technology in 2025, demand for the peso continues to rise.
Additionally, stable oil prices, currently around $83-85 per barrel, enhance Mexico's fiscal revenues, providing further support to the peso. The Bank of Mexico (Banxico) has also initiated a cautious easing cycle, reducing the benchmark interest rate to 7.50% in September. This strategic move aims to balance growth with inflation control, subtly influencing investor confidence in the currency.
Price data reveals that the MXN is reaching 90-day highs against the USD at approximately 0.054684, which is 0.9% above the three-month average. The currency has remained stable within a narrow range of 2.4%. Similarly, the MXN is at seven-day highs against the EUR and JPY, trading at 0.047135 (1.3% above its three-month average) and 8.5359 (4.0% above its average), respectively. The MXN to GBP rate also reflects strength, currently at 0.041278, which is 1.6% higher than its three-month average.
Overall, the Mexican Peso is benefiting from a favorable mix of external economic conditions and domestic policy measures, indicating a stable outlook in the near term, contingent on continued positive developments in trade relations and global market sentiments.
