FX.co ★ Mexican Peso Climbs Near Mid-2024 Highs

The Mexican peso strengthened beyond 17.15 per US dollar, touching its strongest level since mid-2024, as a wide interest rate differential, easing US yields, and reduced sovereign risk lowered Mexico’s risk premium and accelerated carry trade inflows. Banxico’s policy rate, still close to 7% even after recent cuts, continues to offer one of the highest real yields among major emerging markets, sustaining the appeal of peso-denominated debt relative to US assets. At the same time, Banxico’s cautious stance on disinflation has tempered expectations for aggressive easing. Improved signals on Pemex’s balance sheet and fiscal discipline have helped compress sovereign spreads, while resilient remittances, solid tourism revenues, and nearshoring-driven investment have strengthened hard-currency inflows. In parallel, the pullback in US Treasury yields in early February has narrowed the dollar’s yield advantage and encouraged renewed positioning in higher-yielding currencies.