Mexican Peso Falls for Third Consecutive Session Amid Dollar Strength, Ends Week in the Red

The exchange rate for the dollar ranged between a high of 20.5545 and a low of 20.3747 pesos on Friday. Meanwhile, the Dollar Index (DXY), which measures the greenback against six major currencies, rose by 0.53% to 107.54.

Dollar Strength Prevails

The U.S. dollar continues to strengthen as markets await policy updates from Donald Trump’s second term in the White House, policies that typically bolster the dollar’s position against its peers.

Global attention also remains fixed on the escalating Russia-Ukraine war. This week saw heightened tensions as both nations launched missile strikes, marking a new phase in the conflict that began nearly three years ago. Amid these uncertainties, investors have shifted towards safer assets like the dollar.

For the week, the peso closed at 20.3811 per dollar, marking a moderate decline of 11.08 cents, or 0.54%.

Local Factors Weigh on the Peso

Domestically, the Mexican Congress approved a reform initiative this week to dissolve seven autonomous bodies in a bid to cut budgetary costs. Analysts warn that this move could jeopardize the country’s credit rating.

You can also check out our live peso rates on the FXLeaders website to stay ahead and seize every market opportunity.

Economic data provided some relief, as inflation and GDP figures outperformed analysts’ expectations, briefly pulling the peso back below the 20.50 level. Despite the pressure, these improvements offer the Bank of Mexico greater flexibility to continue lowering interest rates.

Technical Outlook

The peso remains under pressure but is moving in an orderly manner. Friday’s high of 20.53 reflects a return to a short- and medium-term bullish trend for the dollar. Should the upward momentum persist, resistance could emerge around 20.81 in the coming days.

Looking ahead to next week, U.S. economic data could drive the exchange rate higher, potentially reaching the 20.57–20.67 range.