Mexican Peso Drops for the Fourth Straight Session

Affected by the strengthening U.S. dollar following robust labor market data, the Mexican peso extended its losing streak this Friday, depreciating for the fourth consecutive session and ending a negative week.

The exchange rate closed at 20.7052 pesos per dollar, compared to Thursday’s official closing of 20.4982 pesos, according to data from Banco de México (Banxico). This represents a depreciation of 20.70 cents, or 1.01%.

USD/MXN

During the session, the dollar traded between a high of 20.7499 pesos and a low of 20.4817 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.45% to 109.66 points.

Strong U.S. Jobs Report Weighs on the Peso

The U.S. Department of Labor reported the creation of 256,000 nonfarm jobs in December, surpassing analysts’ expectations and significantly higher than November’s revised figure of 212,000. The unemployment rate also ticked down to 4.1% from 4.2%.

This data fueled speculation that the Federal Reserve (Fed) will likely delay interest rate cuts until at least June, marking the end of its easing cycle. Before the report, markets anticipated a potential rate cut as early as May, with a 50% chance of a second reduction by year-end.
Markets Eye Trump’s Return to Presidency

Market volatility remains high as the date approaches for Donald Trump to retake office as U.S. President. Traders are closely monitoring his statements for indications of future policies.

Weekly Performance

After four straight sessions of losses, the USD/MXN registered a slight weekly decline. It closed last Friday at 20.6724 pesos per dollar, marking a loss of 3.28 cents or 0.16% for the week.

Earlier this week, the peso rallied briefly following a report by The Washington Post suggesting that Trump might limit his tariff policies to critical imports. However, the optimism was short-lived as Trump quickly dismissed the report, dampening market sentiment.

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.