Mexican peso falls, ending the week in negative territory after Banxico’s rate cut

The Mexican peso reversed its early gains from the session and ended the week with a negative balance of nearly 1.50%.

The peso depreciated on Friday against the U.S. dollar, reversing an initial gain from earlier in the day after the Bank of Mexico (Banxico) cut its benchmark interest rate yesterday.

The exchange rate ended the day at 19.6902 pesos per dollar. Compared to the official closing rate of 19.6225 pesos from yesterday, based on Banxico’s data, this represents a loss of 6.77 cents or 0.35%.

The dollar traded within a range of 19.7591 at its highest and 19.5297 at its lowest. The Dollar Index (DXY) from the Intercontinental Exchange, which compares the dollar against a basket of six major currencies, was down 0.10% at 100.42.

Some analysts also attributed the peso’s decline to the strengthening of the Japanese yen and strong U.S. economic data released throughout the week, which showed resilience despite signs of easing inflation.

On a weekly basis, the peso posted a significant loss of 28.20 cents or 1.45% compared to last Friday’s close of 19.4082 units, also influenced by the advance of more constitutional reforms that raised concerns.

Additionally, Mexico’s stock exchanges recorded sharp losses in Friday’s trading. The local stock indices reversed their slight early-session gains due to profit-taking but managed to keep their weekly balances in positive territory.

The Mexican Stock Exchange’s index, the S&P/BMV IPC, which tracks the most actively traded local stocks, fell 1.52% to 52,778.17 points. The FTSE BIVA, from the Institutional Stock Exchange (Biva), dropped 1.35% to 1,078.11 units.