Overview
- The peso closed the year at 18.0080 per U.S. dollar, advancing about 13.8% from the 2024 close of 20.8829, according to Banxico.
- Weakness in the U.S. dollar, expectations for Federal Reserve easing in 2026, and carry‑trade inflows exploiting wide rate differentials were the principal drivers, analysts said.
- The currency’s deep liquidity helped absorb large flows, with BIS data placing the peso at roughly 2.6% of global daily FX turnover and among the most traded emerging‑market units.
- Thin year‑end trading and a U.S. jobless‑claims reading of 199,000, below forecasts, helped the peso finish near the 18‑per‑dollar mark.
- The stronger currency eases import costs and inflation but reduces the value of remittances, weighs on some exporters’ competitiveness, and lowers prospects for Banxico remanents to the government.