The Mexican peso continued to appreciate against the US dollar on Tuesday morning, reaching its strongest position since last October.
Shortly after 11 a.m. Mexico City time, the USD:MXN rate was 19.25, according to Yahoo Finance!, representing an appreciation of almost 0.4% for the peso compared to its closing position of 19.32 to the dollar on Monday.
The peso also appreciated on Monday after closing at 19.47 to the dollar last Friday, according to the Bank of Mexico.
The strengthening of the peso this week came as the dollar weakened against various currencies after Moody’s Ratings downgraded the United States’ sovereign credit rating by one notch on Friday to Aa1 from the highest Aaa level.
The downgrade, Reuters reported, was “due to concerns about the nation’s growing, $36 trillion debt pile, in a move that could complicate President Donald Trump’s efforts to cut taxes and send ripples through global markets.”
The newspaper Milenio reported that there was a broad selloff of the greenback on Monday in light of Moody’s downgrade of the United States’ credit rating.
At 19.26 to the dollar, the peso hasn’t been stronger since the middle of October, shortly after President Claudia Sheinbaum took office.
The peso has had a good 2025 so far, after ending 2024 at 20.63 to the dollar. It did, however, weaken to above 20.8 to the greenback in April after China escalated a trade war ignited by Trump’s sweeping “reciprocal tariffs.”
Even though Trump has also imposed tariffs on some imports from Mexico, the peso has appreciated almost 8% since the U.S. president began his second term on Jan. 20.
The newspaper El Economista has attributed the strengthening of the peso in recent months to Mexico getting an exemption from some U.S. tariffs (such as the “reciprocal tariffs” announced in April), Mexico’s “high international reserves,” the expectation of lower interest rates in Mexico and “the weakness of the greenback.”
The Bank of Mexico cut its benchmark interest rate by 50 basis points to 8.5% last week.
With reports from Expansión, Milenio and El Economista
