The Mexican peso appreciated on April 25, 2025, marking a week of fluctuating fortunes as it navigated through ongoing trade tensions between China and the United States. The currency was trading at 19.56 pesos per dollar, reflecting a slight appreciation of 0.09% compared to the previous day’s reference price.
This week, the peso has managed to accumulate gains of nearly 0.80%. The recent positive movement in the peso can be attributed to several factors, including China’s decision to grant tariff exemptions on certain U.S. imports, which has raised hopes that the trade war between the two largest economies may be nearing a resolution.
Market sentiment was further bolstered by a better-than-expected report on Mexico's economic activity for February, as investors were concerned that the Mexican economy might have slipped into a technical recession in the early months of the year. According to the National Institute of Statistics and Geography (Inegi), Mexico’s economic activity (IGAE) expanded by 1% in February compared to the previous month.
Despite the appreciation of the peso, the main stock index, S&P/BMV IPC, which includes the 35 most liquid companies in the Mexican market, opened lower with a loss of 0.40%.
On the same day, the peso experienced a slight depreciation of 0.06%, trading around 19.60 pesos per dollar at the beginning of the session. This depreciation was attributed to pressure from a weak national industry and the strengthening of the U.S. dollar. The exchange rate showed volatility, moving between a minimum of 19.58 and a maximum of 19.68 pesos per dollar during the day.
In the interbank market, the peso exhibited volatile behavior during the overnight session, reaching a low of 19.63 pesos per dollar, which indicated a drop of 0.19% compared to the previous close. Nonetheless, over the week, the local currency maintained an accumulated appreciation of 0.45% and a 2.05% increase compared to the previous month.
As for the dollar's performance in Mexican banks, it was being bought at various rates: BBVA offered it at 18.72 pesos for buying and 19.85 for selling, while Citibanamex quoted it at 18.94 and 20.10 respectively. Other banks like Banco Azteca, Banorte, and Inbursa also reported varying prices for the dollar.
In international markets, the euro depreciated by 0.29% against the dollar, and the British pound fell by 0.19%, despite an increase in retail sales in the United Kingdom. Interestingly, Bitcoin gained 1.55%, continuing its trend as an alternative asset.
Market analysts noted that the behavior of the exchange rate and the dollar's price will continue to be influenced by external factors, primarily the performance of the U.S. economy and ongoing trade decisions, alongside local economic indicators that affect the Mexican peso.
Looking back, the peso's journey has been tumultuous. In 2024, it started the year strong against the dollar, even reaching a rate of 16 pesos per dollar, a level not seen in nearly a decade. However, as the year progressed, the peso began to depreciate due to political decisions, including the controversial Judicial Reform and the elimination of autonomous bodies.
The peso's decline was exacerbated by Donald Trump's election as U.S. president and his threats of tariffs on all Mexican and Canadian products unless Mexico improved border security. This political climate pushed the dollar back above 20 pesos, exceeding the forecasts of the Bank of Mexico (Banxico).
For 2025, Banxico anticipates the dollar will trade between 20.24 and 20.69 pesos, a conservative estimate considering the potential impacts of Trump’s policies. Inflation was relatively stable in 2024, fluctuating around 4%, except for June when it nearly hit 6%. Banxico predicts that inflation will remain below four points, reaching up to 3.8% in 2025, while the GDP is expected to rise by just 1.2%.
The Mexican peso, which has a long history as the first currency to use the $ sign, remains the most traded currency in Latin America and the third most traded in the Americas, following the U.S. and Canadian dollars. The abbreviation for the peso is MXN, and prior to 1993, it was referred to as MXP. The currency is divided into 100 centavos, and its coins typically feature the national coat of arms.
In summary, the recent performance of the Mexican peso reflects a complex interplay of domestic economic indicators and international trade relations. As the situation evolves, market participants will be closely watching for any developments that could further influence the peso's trajectory and the broader Mexican economy.
