The Mexican peso closed the week at 17.03 units per dollar, a 0.7% depreciation over five days, according to Bloomberg Línea. The move followed remarks by Federal Reserve Chairman Kevin Warsh, who reaffirmed on Friday, August 28, at Jackson Hole his commitment to bringing U.S. inflation to the 2% target.
El Financiero reported, citing Banco de México data, that the exchange rate stood at 17.03 pesos per dollar, with weekly losses of 0.65%, or 11.05 centavos. The reversal comes after the peso broke through the 17-unit floor in mid-August, when the currency had been strengthening against the dollar. The shift in sentiment follows Jackson Hole, where Warsh said U.S. inflation remains elevated, comments that raised expectations of a rate hike. For the Mexican-American community, the cost of the dollar is felt directly in remittances and cross-border trade.
In his remarks, Warsh stated: "We must be confident that core inflation is advancing toward our goal, clearly and at a sufficient pace. Otherwise, we have work to do." The DXY index, which measures the dollar against a basket of currencies, rose nearly 1% on the week to 99.7 points. The probability of the Federal Reserve raising its rate on December 9 moved from 49% to 61%, calculated Gabriela Siller, director of financial analysis at Banco Base. "The exchange rate is likely to continue facing upward pressure in the coming week," the analyst added. In the event of greater volatility, Banamex sees the next support level at 16.80 pesos per dollar.
For the week ahead, the Banco Base analyst anticipates caution around the publication of key economic data, while the market is already looking toward the Federal Reserve's December 9 decision. That will be the next test for the peso and, with it, the cost of remittances traveling to Mexico.
This article was written with artificial intelligence assistance from verified sources and reviewed by a human editor before publication.