Dollar Strength Pushes Mexican Peso to Yearly Low as 2024 Ends

The Mexican peso ended 2024 on a weak note against the U.S. dollar. Experts and the Bank of Mexico (Banxico) pointed to favorable bets on the American currency as the main cause. Speculative adjustments also played a role ahead of the U.S. administration change.

Banxico’s records show the peso closed at 20.8829 units per dollar in interbank operations. The currency fluctuated between 20.9100 and 20.6990 during the final trading session. This marked its weakest value against the dollar for the year.

The peso started 2024 at 17.0440 units per dollar. Its significant depreciation reflects the changing economic landscape throughout the year. Market dynamics shifted dramatically as the year progressed.

Gabriela Siller, economic analysis director at Banco Base, highlighted the dollar’s strength in the last session. She attributed this to expectations of a cautious Federal Reserve approach to interest rate cuts in 2025. These expectations stem from Donald Trump’s promised trade protectionism.

Dollar Strength Pushes Peso to Yearly Low as 2024 Ends. (Photo Internet reproduction)

Trump’s policies could lead to inflationary pressures in the United States. This possibility has influenced market sentiment and currency valuations. Traders adjusted their positions in anticipation of potential risks in the coming year.

Dollar Strength Pushes Peso to Yearly Low as 2024 Ends

The peso entered a volatile period against the dollar after the June 2 elections. Claudia Sheinbaum’s victory in the presidential race marked a turning point for the currency. Before the elections, on May 31, the peso traded at 16.9682 units per dollar.

At that time, the Mexican government proudly dubbed the peso as “superpeso” due to its strength. However, this nickname proved short-lived as economic realities set in. The currency’s performance reflects the complex interplay of domestic and international factors.

The peso’s weakening raises questions about Mexico’s economic outlook for 2025. It also highlights the interconnectedness of global markets and political events. As the new year begins, all eyes will be on how the peso fares in this evolving economic landscape.