Mexican Peso Rises on Fed and Optimistic Trade News

The Mexican peso appreciated against the U.S. dollar on Wednesday, supported by the Federal Reserve’s policy announcement and renewed optimism around U.S.-China trade relations. The exchange rate closed the session at 19.6050 pesos per dollar. Compared to Tuesday’s official close of 19.6598, according to data from the Bank of Mexico (Banxico), this represents a gain of 5.48 centavos or 0.28% for the peso. The dollar traded in a range between a high of 19.6802 and a low of 19.5564 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.65% to 99.92. As expected, the Federal Reserve kept its benchmark interest rate unchanged at 4.25–4.50%. However, its statement highlighted increased risks to the economic outlook, particularly related to inflation and tariffs. “Uncertainty around the economic outlook has risen further,” the Fed noted. “The Committee remains attentive to risks on both sides of its dual mandate and sees rising risks of both higher inflation and unemployment.” Separately, White House economic adviser Stephen Miran said the Trump administration does not expect a resurgence in U.S. inflation, despite the Fed’s concerns over tariffs. Markets also reacted to news that Treasury Secretary Scott Bessent and top trade negotiator Jamieson Greer will meet with China’s top economic official, He Lifeng, this weekend in Geneva—seen as a possible step toward a trade agreement. Tariff-related tensions eased slightly following the announcement of this meeting, which could pave the way for progress in negotiations. Traders also digested comments from leaders of the USMCA (T-MEC) countries—Canada, the U.S., and Mexico—reaffirming that a review of the agreement is expected in 2026, easing concerns about near-term changes. On the technical side, the exchange rate has remained stable in recent sessions, as traders await further news on U.S. tariff negotiations. However, there is a slight downward bias. Indicators suggest indecision, with the peso trading in a range between 19.50 and 19.65 per dollar. That said, growing downward pressure may signal a potential shift in trend.