Buoyed by a weaker greenback, the Mexican peso appreciated on Wednesday morning to trade below 17 to the US dollar.

At midday Mexico City time, the USD:MXN exchange rate was 16.97, according to Bloomberg.

Earlier on Wednesday, the peso reached 16.95 to the dollar, its strongest position since June 2024. Compared to the Bank of Mexico’s closing USD:MXN rate of 17.06 on Tuesday, the peso appreciated 0.65% to reach 16.95 to the dollar.

Gabriela Siller, director of economic analysis at Banco Base, wrote on X that the peso appreciated on Wednesday morning due to “the weakness of the dollar” as a result of the U.S. Treasury Department’s announcement that it was increasing a bond buyback operation. The dollar weakened after the Treasury Department announced in a statement that it was “increasing, by at least double, the size of liquidity support buyback operations for longer-dated nominal coupon securities (the 10-year to 20-year sector and the 20-year to 30-year sector).”

At midday, the US Dollar Index, which measures the greenback against a basket of foreign currencies, was down 0.7% compared to the closing level on Tuesday.

Janneth Quiroz, director of economic analysis at the Monex financial group, said that the peso benefited from “the retreat of the dollar” and from the United States’ decision on Tuesday to pause planned 50% tariffs on almost $30 billion worth of Canadian goods.

The appreciation of the peso on Wednesday morning came after the currency broke the 17-unit-per-dollar floor last Friday morning. However, the peso closed at 17.03 to the dollar on Friday, according to the Bank of Mexico, and was also above 17 at the end of trading on Monday and Tuesday.

The peso has appreciated around 6% against the dollar so far this year after ending 2025 at 18.00 to the greenback.

In the most recent MND Peso Index™ analysis, which was conducted in early August when the USD:MXN rate was 17.22, the peso was found to be overvalued against the dollar by 2.4%.

With reports from El Economista and El Financiero