The Mexican peso weakened to 17.5 per USD at the end of April, its lowest level in three weeks, as heightened geopolitical tensions increased demand for safe-haven currencies. US President Trump indicated that the blockade on Iranian tankers will remain in place in the near term, dampening hopes for a resolution to the conflict and prompting investors to shift away from emerging-market assets toward harder currencies. The US dollar was further supported by hawkish dissent within the Federal Reserve despite its decision to keep interest rates on hold.
At the same time, Mexico’s annual inflation rate eased to 4.53% in the first half of April 2026, down from 4.63% in March, even as global energy prices rose due to the Iran-related tensions. Core inflation also fell to 4.27%, its lowest level in five months, from 4.46%. This moderation in inflation has strengthened expectations that the Bank of Mexico may adopt a more dovish policy stance, adding to the downward pressure on the peso against the US dollar.
