Mexican Peso Reaches 18-Month High Against US Dollar

Mexico's peso just notched a win that has economists doing double takes.

The currency closed at 17.65 to the dollar on Thursday, marking its strongest position since July 2024. That's five straight days of gains, totaling nearly 2% growth in less than a week.

The momentum isn't new. In 2025, the peso appreciated almost 16% against the dollar, defying predictions from financial experts who expected it to weaken.

Three main factors are driving the peso's strength, according to Gabriela Siller, director of economic analysis at Banco Base. The US dollar has been weakening globally. Interest rate differences between Mexico, the US, and Japan are making the peso more attractive to investors. And rising silver prices are boosting Mexico's export earnings.

President Claudia Sheinbaum's recent commitment to maintaining the National Electoral Institute's independence also sparked investor confidence. Markets respond positively when governments show respect for democratic institutions.

The peso's performance becomes even more remarkable considering recent trade uncertainties. President Trump questioned the value of the USMCA trade agreement this week, calling it "irrelevant" to the United States.

But financial analyst Paula Chaves from HF Markets says that rhetoric actually helps the peso. When the trade agreement gets questioned, markets interpret the risk as greater for the US than for Mexico. Investors reduce their dollar exposure in response.

The Bright Side

The peso's strength shows that Mexico's economic fundamentals are solid enough to weather political storms. Markets recognize that weakening the USMCA would hurt both countries, particularly in competitiveness and efficiency.

So far in 2026, the peso has appreciated just over 2%. That's good news for Mexican consumers buying imported goods and for the country's debt management.

A strong currency also signals international confidence in Mexico's economic policies and stability. When global investors trust your economy enough to hold your currency, that's a vote of confidence that ripples through business decisions, job creation, and growth opportunities.

Mexico's currency is proving that sometimes the experts get it wrong, and the underdog can surprise everyone.