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Mexican peso strengthens as real rates support demand

USD/MXN fell back below 17 as the US dollar weakened and Banxico paused rate cuts, keeping real interest rates supportive for the peso.

Reported · Written up by our desk · Major Pairs

FXStreet notes that the Mexican peso has strengthened, with USD/MXN back below 17, supported by a weaker US dollar and Mexico’s relatively strong performance versus other major currencies.

According to FXStreet, Michael Pfister at Commerzbank attributes the move to factors including better-than-expected growth, smoother USMCA negotiations with the US, easing core inflation, and Banxico’s decision to pause rate cuts, which leaves real interest rates supportive for the currency.

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