Mexican Peso Rallies Nearly 4% for the Week as Market Optimism Surrounds the Fed

Indicators Support a 25 Basis Point Adjustment to Fed Interest Rates, but Some Media Outlets Revive Discussion of a Possible 50 Basis Point Hike, Sparking Risk Appetite.

The Mexican peso appreciated for the third consecutive session this Friday, ending the week with a solid rally. The currency gained ground thanks to growing optimism ahead of an anticipated monetary decision by the Federal Reserve (Fed).

The exchange rate closed at 19.2142 pesos per dollar. Compared to yesterday’s official closing rate of 19.4724, according to data from the Bank of Mexico (Banxico), the peso saw a gain of 25.82 cents, equivalent to a 1.33% increase. The dollar traded within a range, with a high of 19.5715 pesos and a low of 19.1954 pesos. The Dollar Index (DXY) from the Intercontinental Exchange, which measures the U.S. currency against six major counterparts, dropped 0.22% to 101.130 points.

The Mexican currency gained nearly 4% over the week, benefiting from a weaker dollar, despite uncertainties in the local market following the Senate’s approval of a judicial reform backed by Morena earlier in the week.

Compared to last Friday’s close of 19.9984, today’s figure marks a recovery of 78.42 cents for the peso, or 3.92%. U.S. inflation data released earlier in the week was the key driver behind this rally.

Indicators support a 25 basis point adjustment to Fed interest rates, but some media outlets have reignited debate over a possible 50 basis point hike, which has spurred greater risk appetite in the markets.