THE MND PESO INDEX™

Tracking the exchange rate people actually experience

MND Intelligence · Fourth edition

Welcome to the fourth edition of the MND Peso Index™, part of the MND Intelligence™ suite of data products developed by Mexico News Daily.

The MND Peso Index™ is a monthly purchasing power parity measure that assesses whether the Mexican peso is overvalued or undervalued against the US dollar by comparing the prices of a standardized basket of 20 goods and services in Mexico and Dallas, Texas.

Unlike previous editions, our latest MND Peso Index™ assessment is being published in the same month as its underlying price survey, making it even more timely.

Our headline finding for August 2026 indicates that the peso was overvalued against the dollar by 2.4%, a decrease of 0.5 percentage points compared to the 2.9% overvaluation we determined in late June.

For a detailed explanation of the purpose of the MND Peso Index™, the makeup of the basket and more, please refer to the index article we published in June. You can read even more about the index in our introductory article published in early May.

What did the MND Peso Index™ tell us in August 2026?

In August 2026, the MND Peso Index™ suggests that the USD:MXN exchange rate on the date we collected prices in various Mexican cities and in Dallas, Texas, overvalued the Mexican peso by 2.4%.

The Mexican and Dallas prices were collected on Aug. 6, 2026. The MND Peso Rate — the simple average of the 20 item-level implied exchange rates, rather than the rate produced by dividing the total Mexican basket cost by the total Dallas basket cost — came in at 17.64 pesos per dollar, compared with a Banxico FIX rate of 17.22 pesos per dollar on Aug. 6.

The gap between those two figures indicates that the peso — at a rate of 17.22 to the US dollar — was overvalued by 2.4% in early August.

In other words, the USD:MXN exchange rate — if it reflected the rate at which the peso could buy the basket’s goods and services in Mexico at the same dollar prices as in the United States — would be 17.64.

In the table below, you can see the Mexico and U.S. prices for all 20 goods and services in the basket, the total costs of the two baskets, the implied exchange rate for each item, the MND Peso Rate (ie., the overall implied rate), the Banxico FIX rate on the date prices were collected and the overvaluation assessment for the peso.

If the implied rate is lower than the current exchange rate, it implies that the item is less expensive in Mexico than you would expect it to be, and vice versa.

Why did the peso’s ‘overvalued’ assessment decrease between late June and August? 

The MND Peso Rate — the mean implied exchange rate — changed considerably between late June and early August, declining by 37 centavos from 18.01 to 17.64.

The difference between the Banxico USD:MXN fix rate we used in late June (17.50) and that we used in early August (17.22) was 28 centavos. In an article published last Friday, we wrote about the reasons why the peso has recently appreciated.

The gap between the MND Peso Rate and Banxico’s FIX rate in early August was 42 centavos, down from 51 centavos in late June. The narrowing of the gap between the two rates is the reason why the peso’s overvaluation assessment fell from 2.9% in late June to 2.4% in early August.

But why, you might wonder, did the MND Peso Rate come down? The decline was the result of changes in the implied rates for seven of the 20 goods and services. The implied rates for the other 13 goods and services stayed the same between late June and early August.

The implied rates for four products — diapers, a hose, motor oil and eggs — declined. In the case of the diapers and the motor oil, the implied rate declined because prices in Mexico fell. In the case of the hose and the eggs, the implied rate declined because prices in Dallas increased.

The implied rates for two goods and one service — dog food, a Costco rotisserie chicken and pet grooming — increased. In the case of the dog food and the rotisserie chicken, the implied rates increased due to price increases in Mexico. In the case of the pet grooming, the implied rate increased due to a price reduction in Dallas.

Overall, the combined downward effect of the four lower implied rates outweighed the upward effect of the three higher rates. Thus the MND Peso Rate fell between late June and early August.

The cost of the Mexican and US baskets both fell in August 

While the MND Peso Index™ is NOT a cost-of-living index, it is worth noting that the total costs of the Mexican and U.S. baskets of goods and services were lower in early August than in late June. However, the reduction was minimal in both cases.

The basket of goods and services in Mexico cost 5,650 pesos on Aug. 6, a reduction of 59 pesos, or 1%, compared to June 29. The slight decline in the cost of the Mexican basket in early August came at a time when inflation was easing, with Mexico’s annual headline rate falling to 3.12% in July from 3.37% in June.

The basket of goods and services in Dallas cost $350.68 on Aug. 6, a reduction of $3.50, or 1%, compared to June 29. The slight decline in the cost of the Dallas basket in early August came at a time when inflation in the United States was also slowing, with the annual headline rate in the U.S. falling to 3.4% in July from 3.5% in June.

Although the cost of the Mexican basket declined in peso terms between late June and early August, its price increased when converted to dollars because the peso appreciated 1.6% in the period. The cost of the Mexican basket rose to US $328.12 on Aug. 6 from $326.21 on June 29.

The MND Peso Index™ has now found the peso to be overvalued in April, May, June and August 

Through the use of the MND Peso Index™, we have now determined that the peso was overvalued against the US dollar by 2.8% in late April, 4% in late May, 2.9% in late June and 2.4% in early August.

The difference between the lowest overvaluation assessment — our most recent one — and the highest is just 1.6 percentage points.

So far in 2026, the peso has appreciated 5.4% against the US dollar. It closed at 18.00 to the greenback on the final day of 2025, according to the Bank of Mexico, while the closing USD:MXN rate on Tuesday, Aug. 11 was 17.08. If the Banxico FIX rate was 17.08 when we collected the prices for the Mexican and Dallas baskets on Aug. 6, the overvaluation assessment for the peso would have been 3.3%.

* Price sources: Mexico prices were collected from the websites and apps of Walmart México, Costco México, AutoZone México, Telmex, Cinépolis, Petco México, McDonald’s, Starbucks, Netflix, Spotify and Microsoft. Dallas prices were collected from their U.S. equivalents. The Banxico FIX rate of 17.22 published on Aug. 6, 2026, was used as the official exchange rate reference.