The Mexican peso has been experiencing fluctuations against the US dollar, recently closing at P58.732 per dollar on November 15, 2024. This marked a slight strengthening of 4.5 centavos from P58.777 on November 12, although it represented a decline of 47.2 centavos week on week [8c2efa52]. The peso's performance is largely influenced by comments from US Federal Reserve Chairman Jerome H. Powell, who indicated that there is no immediate rush to lower interest rates, suggesting that borrowing costs may remain elevated due to a strong US economy and inflation exceeding the 2% target [8c2efa52].
Earlier in November, the peso had weakened significantly, closing at P58.595 per dollar on November 11, 2024, down from P58.26 on November 8, 2024. This decline was attributed to market anxieties following Donald Trump's election victory and the potential implications of his economic policies [6bb4cb8b]. Analysts noted that the peso had lost over 18% of its value against the dollar throughout 2024, with predictions for its performance ranging from P58.40 to P58.75 for November 12, 2024 [6bb4cb8b].
As traders anticipate the next Federal Reserve policy meeting scheduled for December 17-18, 2024, they expect the peso to trade within a range of P58.50 to P58.95. Economist Michael L. Ricafort has predicted a narrower range of P58.40 to P58.90, reflecting ongoing uncertainties in both domestic and international markets [8c2efa52]. The recent US producer price index (PPI) report, which showed a 0.2% increase in October, further indicates stalled progress toward lower inflation, adding to the cautious outlook for the peso [8c2efa52].
In response to these developments, Mexican President Claudia Sheinbaum has sought to reassure investors about the resilience of the Mexican economy, despite the potential for trade tensions and tariffs that could arise from Trump's return to power [6bb4cb8b]. The interplay between domestic sentiment and international economic dynamics remains crucial in determining the future trajectory of the peso as global markets react to these developments [7c008e6a].