Strong Peso Pressures Exporters

The dollar has fallen to around 16.93 pesos, a level not seen since 2024, according to data from the Bank of Mexico. The stronger peso has put pressure on exporters in states such as Chihuahua, the Mexican Institute of Finance Executives (IMEF) has warned.

Gonzalo Aguilera, president of IMEF Chihuahua, explained that since June, the peso has appreciated by about 2.3% against the dollar; however, this movement does not reflect the global trend, as the dollar has lost approximately 2.1% against other currencies.

Similarly, Aguilera points out that one of the main factors behind the decline in the U.S. dollar is the shift in expectations regarding interest rates in the United States. Although the market continues to anticipate possible rate moves, the likelihood of such moves has decreased.

Noting that about a month ago, the probability of a rate change stood at 90%, but now hovers around 60%, due to the U.S. Federal Reserve’s (Fed) decision to keep its options open.

For Chihuahua, the outlook is negative, due to the state’s significant share of national exports. A stronger peso reduces its value in terms of the national currency, since exporting companies’ revenues are earned in dollars.

 This effect can be seen in the export-oriented manufacturing sector, which is one of the main drivers of the state’s economy; therefore, current exchange rate levels have a direct impact on companies’ revenues and the state’s economic activity.

The president of the IMEF noted that the peso’s performance against the dollar depends on the Federal Reserve’s upcoming decisions, so it will be necessary to closely monitor the meetings and indicators that determine the direction of interest rates in the United States.