MEXICO CITY, July 31, 2026, 16:01 CST
- The peso ended the session at 17.3207 against the dollar, up 0.11% on Friday and rising 0.94% over the week.
- Policy rates currently yield a straightforward carry of 2.64% up to July 1, 2027, while consensus forecasts indicate depreciation of 2.65% for the same timeframe.
- Banxico will set interest rates on August 6. The U.S. July jobs data is due August 7.
The Mexican peso gained 1.02% in July, though a basic carry scan reveals limited buffer until next July. The onshore market was shut as of the dateline. Banxico released the official closing level at 14:10.
Banxico holds its policy rate at 6.50%, which is 287.5 basis points higher than the U.S. Federal Reserve’s target midpoint. Over a period of 335 days, that spread yields a simple carry of roughly 2.64%.
A survey conducted on July 1 among 24 currency experts gave a one-year median forecast of 17.78 per dollar. That represents a projected 2.65% depreciation for the peso from Friday’s closing level. The carry-minus-currency spread is about negative one basis point.
| Illustrative carry test | Value |
|---|---|
| Banxico policy rate | 6.50% |
| Fed target range | 3.50%-3.75% |
| Fed target midpoint | 3.625% |
| Mexico-U.S. rate spread | 2.875 percentage points |
| Days up to July 1, 2027 | 335 |
| Straight spread carry | 2.64% |
| Consensus median for USD/MXN | 17.78 |
| Forecast peso weakening | 2.65% |
| Buffer before expenses | About -0.01 percentage point |
The calculation maintains both policy rates unchanged, applying a 365-day basis.
This screen displays only the policy rate, omitting bond curves, forward points, taxes, compounding, and liquidity.
The connected reports reflected various phases of the market. One indicated 17.34 shortly after the open, while another noted an intraday value of 17.35. Banxico’s wholesale closing figure was 17.3207.
The day’s change was slight, but the overall trend was not.
| Period | Starting USD/MXN | Friday close | Peso gain |
|---|---|---|---|
| Friday | 17.3395 | 17.3207 | 0.11% |
| Week beginning July 24 | 17.4845 | 17.3207 | 0.94% |
| In July | 17.4986 | 17.3207 | 1.02% |
| From December 31 | 18.0080 | 17.3207 | 3.82% |
| Past twelve months | 18.8680 | 17.3207 | 8.20% |
Banxico’s official closing rates for USD/MXN are used to determine peso appreciation.
The recent gains have increased the cost for entering new peso positions, leaving investors with reduced spot protection in the event of a projected reversal.
Some of the resilience can be attributed to economic growth. Mexico’s preliminary gross domestic product for the second quarter was up 1.5% compared to the previous quarter. Year-on-year, output climbed 2.1%.
The U.S. GDP came in at 1.5% on an annualised basis, decelerating from 2.1% in the previous quarter. The two headline figures cannot be directly compared.
| Economy | Second-quarter growth | Measurement | Previous quarter |
|---|---|---|---|
| Mexico | 1.5% | Quarter over quarter, preliminary | -0.6% |
| Mexico | 2.1% | Year over year, preliminary | — |
| United States | 1.5% | Annualised quarter over quarter, advance | 2.1% |
| United States | 0.4% | Non-annualised quarter over quarter, advance | — |
Mexico’s numbers are early estimates. The U.S. data represents an advance estimate.
Commerzbank’s Michael Pfister (ETR:CBK) attributed the peso’s stability to optimism over U.S. economic growth. He pointed to “a more robust U.S. real economy from which Mexico should benefit.” Mexico’s recent projection aligns with that outlook, but further adjustments cannot be ruled out. Reuters
The Federal Reserve kept interest rates steady at 3.50%-3.75% on Wednesday. Three members supported a 25 basis-point hike instead. The dissent sustains the potential for higher U.S. rates.
The focus turns to policy over growth next week. Banxico is set to announce on Thursday, with U.S. payroll data due Friday.
| Mexico City time | Event | Current marker |
|---|---|---|
| August 6, 13:00 CST | Banxico policy announcement | Rate at 6.50%; market consensus is hold |
| August 7, 06:30 CST | U.S. July jobs data | Set for 08:30 EDT |
Markets broadly anticipate Banxico to keep rates steady at 6.50%. An unexpected reduction would shrink the rate differential right away. Holding rates could maintain the current carry, though it would not restore the projected buffer.
Risks: Robust U.S. employment data may boost Treasury yields and the dollar. If Banxico cuts rates, this would dampen the peso carry. Further energy supply interruptions could drive up inflation and cause greater rate volatility.
