The Mexican peso weakened significantly against the U.S. dollar after the Bank of Mexico (Banxico) released its September policy minutes, which signaled potential future interest rate cuts. This downward pressure pushed the Latin American currency to levels not seen since November 2025.
According to official records from Banco de México, the exchange rate closed at 18.4111 pesos per dollar on October 9, 2026. During the session, the currency suffered a 1.15% loss, trading within a daily range of 18.1427 and 18.4986 pesos per dollar as investors quickly adjusted their market expectations.
Five Consecutive Weeks of Declines
The recent dip marks the completion of five consecutive weeks of losses for the currency. Financial publications, including El Economista, reported a cumulative decline of roughly 9% from levels recorded on September 4. Although Banxico’s reference rate remained steady at 6.50%, market sentiment shifted drastically after the central bank released its internal policy discussions.
Financial analysts note that the shrinking interest-rate differential between Mexico and the United States has reduced the appeal of the carry trade-a popular investment strategy where traders borrow in lower-yielding currencies to invest in higher-yielding assets.
Broader Economic Pressures and Market Outlook
These changing dynamics come on top of broader global economic challenges, including a stronger U.S. dollar and lingering global risk aversion. While the Federal Reserve navigates its own monetary path, Banxico faces domestic economic conditions that differ from those in the United States.
Market participants continue to monitor upcoming U.S. macroeconomic data and geopolitical developments, both of which are expected to dictate the trajectory of the peso-dollar exchange rate through the remainder of the year.
Frequently Asked Questions
Why is the Mexican peso declining against the U.S. dollar?
The peso has declined due to signals of potential interest rate cuts from Banxico, a narrower interest-rate differential with the U.S., a stronger dollar, and reduced appeal for the carry trade.
What was the exchange rate of the peso on October 9, 2026?
According to Banco de México records, the dollar closed at 18.4111 pesos on October 9, 2026, after the peso fell by 1.15% during the session.
What is Banxico’s current reference rate?
Banxico’s reference rate has remained at 6.50%, though recent policy minutes have opened up debate regarding future cuts.
How long has the peso been on a losing streak?
The currency recently completed five consecutive weeks of losses, accumulating a decline of about 9% from September 4 levels.
What is the carry trade and how does it affect the peso?
The carry trade involves borrowing in countries with low interest rates to invest in higher-yielding countries like Mexico. A narrower interest-rate gap between Mexico and the U.S. reduces the profitability of this strategy, prompting investors to pull out and weakening the local currency.
