FX.co ★ Mexican Peso Hovers Below 19.6 USD

The Mexican peso remained just below 19.6 per USD, nearing its highest point in over six months—a peak of 19.51 reached on April 25th. This strength was supported by a hawkish stance from the Bank of Mexico and a generally weakened dollar. Domestically, the unemployment rate fell to a record low of 2.2% in March, highlighting the robustness of the labor market despite restrictive policies. Concurrently, core inflation rose to 3.9% by mid-April, the highest level since September 2024, further justifying the Bank of Mexico's decision to maintain its benchmark rate at 11%. The significant real interest-rate differential continues to attract carry-trade inflows. Meanwhile, a "very productive" discussion between Presidents Trump and Sheinbaum eased concerns regarding potential U.S. tariffs on steel, automobiles, and agricultural products. Additionally, stable oil export revenues are strengthening Mexico’s external accounts. As fading expectations for a swift resolution to the U.S.-China trade tensions lead to a softer dollar, investors are recalibrating their focus from U.S. assets to higher-yielding alternatives.