Unstoppable super peso! Mexican currency hits yearly lows against the dollar after US inflation data and trade truce

The Mexican peso appreciated significantly this Tuesday, May 13, reaching its best level of the year against the dollar, driven by better-than-expected inflation data in the United States and renewed optimism regarding the trade truce between the U.S. and China. Markets await the next decision by Banxico.

The national currency showed notable strength in the foreign exchange markets, reflecting greater investor confidence and a more stable economic outlook, at least in the short term.

The Mexican peso appreciated by around 1.08% to 1.1% during the day. The interbank rate reached levels of 19.39 and 19.41 pesos per dollar, levels not seen since mid-October of last year. This strength placed the peso among the best-performing currencies against the dollar globally on the day.

At bank counters, the dollar was quoted as follows at the start of the day:

* BBVA Mexico: Buy $18.68 MXN | Sell $19.81 MXN

* Citibanamex: Buy $18.91 MXN | Sell $20.06 MXN

* Banco Azteca: Buy $18.70 MXN | Sell $20.15 MXN

* Banorte: Buy $18.40 MXN | Sell $20.00 MXN

* Banca Afirme: Buy $18.60 MXN | Sell $20.10 MXN

Several circumstantial elements contributed to this favorable performance of the Mexican currency:

* US Inflation Data: The April Consumer Price Index (CPI) in the United States showed a smaller-than-expected increase (0.2% monthly, 2.3% annual). This weakened the dollar internationally, as speculation increased that the Federal Reserve may have more room to cut interest rates.

* US-China trade truce: Optimism generated by the preliminary agreement between the world's two largest economies to pause the imposition of new tariffs reduced risk aversion in global markets, benefiting emerging market currencies such as the peso.

* Mexican domestic policy: The agreement recently signed by President Claudia Sheinbaum with the private sector to keep basic food basket prices unchanged was well received by the markets, contributing to the stability of the peso.

* Trump criticizes the Fed: Statements by former US President Donald Trump criticizing the Federal Reserve have also fueled expectations of looser monetary policy in the US, putting downward pressure on the dollar.

The strength of the peso, while positive news for inflation control and the purchasing power of imported goods, could present challenges for the Mexican export sector, making its products more expensive abroad and also reducing the peso-denominated returns on remittances sent by Mexicans.

Financial analysts are closely monitoring exchange rate developments. Janneth Quiroz, director of economic and foreign exchange analysis at Monex, noted that "traders continue to await Banxico's monetary policy meeting and a possible trade agreement between Mexico and the US, with the aim of easing pressure on the Mexican economy."

For her part, Gabriela Siller, director of Economic Analysis at Grupo Financiero BASE, highlighted the three key factors weakening the dollar: lower risk aversion due to the US-China agreement, expectations of Fed rate cuts, and Trump's criticism of the Fed.

Locally, attention is focused on the Bank of Mexico's (Banxico) monetary policy decision, which will be published next Thursday. A further half-percentage-point cut in the benchmark interest rate is widely expected. This move, although expected, could influence the peso's exchange rate. Projections for May suggest the exchange rate could fluctuate between 19.28 and 20.11 pesos per dollar, although subject to volatility generated by Fed decisions and other geopolitical events.

"The Mexican peso (…) gained ground against the dollar on Tuesday, May 13, after the release of inflation data in the United States. The Mexican currency closed the day with gains compared to the greenback, reflecting investor confidence and greater economic stability in the country." – El Financiero / ABC News.

In the area of ​​retirement savings, a report highlighted by La Jornada in its "Ocho Columnas" section revealed that the top 10 Afores in Mexico accumulated profits of $134 billion pesos in the last decade (from 2013 to March 2025). Among the most relevant administrators are Coppel, Banamex, and Azteca, which manage the funds of 68 million workers. CONSAR data for the first quarter of 2025 indicate that Profuturo ranked as the Afore with the best net returns across most age groups. Furthermore, starting this May, Afore account statements will include a display of the number of weeks contributed to the Mexican Social Security Institute (IMSS).

In the fast-paced cryptocurrency market, Bitcoin (BTC) continues its rally, trading above $104,000, while Ethereum (ETH) surpasses $2,600, both with significant gains in recent hours. Notably, Bitcoin's market capitalization has surpassed that of corporations like Amazon.

Analysts attribute this bullish momentum to a confluence of factors, including a perceived more favorable regulatory environment under the Trump administration in the U.S., the approval of new cryptocurrency ETFs (exchange-traded funds), and growing institutional adoption that cements a climate of greater predictability and confidence.

The interaction between traditional monetary policy, the strength of local currencies like the peso, the performance of pension systems, and the rise of alternative digital assets creates a complex and dynamic financial landscape for Mexican savers and investors.