The Mexican peso closed on Friday, October 9, 2026, at 18.41 units per dollar, its weakest level since November 24, 2025, with a weekly depreciation of 1.4 percent, according to Bloomberg data reported by El Financiero. Over five weeks, it has accumulated a 9 percent decline against the U.S. currency.

Pressure on the exchange rate responds to the narrowing of the interest rate differential between Banco de México and the Federal Reserve. Banxico's minutes point to a bias in favor of cutting the benchmark rate at least once, while the Chicago Mercantile Exchange futures market assigns an 86 percent probability to a Fed hike in December. With Banxico's rate at 6.5 percent and the Fed's at 4.0 percent, the differential stands at 250 basis points, its historic low. That margin sustains carry trade operations, in which investors borrow in low-yielding currencies to invest in pesos, and its reduction makes imports and inputs for Mexican industry more expensive.

Gabriela Siller, director of analysis at Banco Base, noted that speculative positions expecting an appreciation of the peso fell 79.58 percent between September 30 and October 6, a figure she attributed to the unwinding of the carry trade. The analyst projected a differential of 200 basis points if Banxico cuts 25 basis points, to 6.25 percent, and the Fed raises its rate to the 4.0 to 4.25 percent range. Felipe Mendoza, an analyst at EBC Financial Group, estimated that this week the exchange rate will trade between 18.30 and 18.55 units per dollar, with 18.44 as immediate resistance.

Banks have already adjusted their forecasts, according to El Universal Cartera: Banorte moved from 17.30 to 18.10 pesos per dollar for the end of 2026 and from 17.45 to 17.80 for 2027, while Banamex moved them from 17.57 to 18.12 and from 18 to 18.48. In Citi's survey of 37 banks, brokerages, and research groups, the consensus forecasts a parity of 18 units at the end of 2026.

The Federal Reserve's rate decision in December and Banco de México's next meeting mark the next stage for the peso. Banks' projections for 2027 range between 17.80 and 18.48 units per dollar.

This article was written with the assistance of artificial intelligence based on verified sources and reviewed by a human editor before publication.