On Thursday, May 8, 2025, the Mexican peso strengthened against the US dollar, trading at approximately 19.51 pesos per dollar. This marks a 0.39% appreciation from the previous day when the exchange rate closed at 19.59 pesos per dollar. The Mexican currency's rise follows the release of inflation data for April, which exceeded market expectations but remained within the target range set by the Bank of Mexico (Banxico).
The dollar's performance was also influenced by a strengthening of the US dollar in the international market, with the Dollar Index (DXY) increasing by 0.32%. This uptick in the dollar's value coincided with news of a "complete" trade agreement between the US and the United Kingdom, announced by President Donald Trump.
"Today, the peso continues its weekly appreciation, driven by the dollar's downward correction and the report on Mexico's inflation, which rose slightly in April," stated Janneth Quiroz Zamora, director of Economic, Exchange, and Stock Analysis at Grupo Financiero Monex.
As of 07:30 AM Mexico City time, the exchange rate stood at 19.51 pesos per dollar, reflecting a 0.2% appreciation. This marks the third consecutive session of gains for the peso, which analysts attribute to the Federal Reserve's (Fed) decision to maintain interest rates unchanged, signaling caution amid tariff uncertainties.
"The peso is in an appreciation trend, and we anticipate that recovery could continue after breaching the 19.63 pesos per dollar level," noted analysts at Grupo Financiero Banorte. They identified immediate resistance at 19.50 pesos and support at 19.65 pesos.
The inflation report from INEGI indicated that inflation in April rose to 3.93% annually, up from 3.80% in March, surpassing the market forecast of 3.90%. This increase in inflation has implications for future monetary policy decisions, particularly as the Fed maintains its rates in the range of 4.25% to 4.50%.
Despite the dollar's strengthening, the Mexican peso's performance stands out. Seven of the 16 major currencies tracked by Bloomberg were advancing against the dollar, with the peso ranking fourth in terms of appreciation.
The Official Gazette of the Federation (DOF) reported an exchange rate of 19.5880 pesos per dollar, reflecting the closing rate from the previous session. Various banks in Mexico are offering differing rates for the dollar; for instance, BBVA Mexico's selling price was 19.80 pesos per dollar, while Banco Azteca listed it at 20.05 pesos per dollar.
As the market digests the implications of the Fed's decisions and the evolving trade landscape, analysts at Grupo Financiero BX+ anticipate a decrease in risk aversion, fueled by favorable trade news. They noted that the White House might reverse some restrictions on microprocessor exports to China, further impacting the dollar's strength.
"We expect the dollar to continue fluctuating as investors react to ongoing developments in trade agreements and economic data releases," commented a market analyst.
In summary, the Mexican peso's appreciation against the dollar reflects a complex interplay of domestic inflation data and international trade dynamics. As the economic landscape continues to evolve, market participants will be closely watching for further developments that could influence currency valuations.
