Price of the dollar ‘breaks forecasts’ while the Mexican peso triumphs and is thus quoted this Thursday, January 1, 2026

Mexican Peso Holds Near 18 Per Dollar as 2025 Closes With Historic Gains

Breaking financial news from the currency markets shows the Mexican peso stabilizing around 18.00 per U.S. dollar as 2025 ends, capping a year of remarkable strength against the greenback.

At the close of trading on December 31, 2025, the reference rate published by the central bank hovered near 18.00 pesos per dollar. This settlement corresponds to an annual peso appreciation of about 13.40%, marking the largest yearly gain as Mexico adopted a free-floating exchange regime in 1994, according to official data cited by financial observers.

The peso also touched a December low near 17.90 per dollar, a level not observed since mid-2024, underscoring a robust rally that gained momentum in the final weeks of the year.

On the international stage, the peso demonstrated one of its strongest performances in recent history, recording an approximate 15.68% annual rise against the U.S. currency in 2025.

Today’s spot rate and bank quotes

The current general market rate shows:

• 1 dollar equals approximately 18.00 Mexican pesos
• Buy rate around 17.60
• sell rate around 18.28

Below are the latest quotes from major Mexican banks, reflecting daily variations in the peso-dollar pairing:

Bank	Purchase	Sale
Affirm	17.20	18.60
Azteca Bank	17.00	18.64
Banorte	16.80	18.30
BBVA	16.96	18.51
Banamex	17.48	18.48

Additional reference points show market-quoted levels for the dollar against the peso posted by other institutions, with the average at roughly 18.00 pesos per dollar and typical buy/sell ranges around 17.60 and 18.28, respectively.

Context and what’s driving the shift

Analysts note that 2025 delivered the strongest performance for the peso against the dollar in recent memory. The year-wide appreciation abroad and a comparatively resilient domestic economy contributed to the currency’s strength, helping Mexico close 2025 with confidence heading into 2026.

While the peso’s rally reflects broader market dynamics, Mexico’s monetary policy habitat and external demand for its assets are seen as sustaining strength into the new year. Financial observers point to the end-of-year positioning and a favorable global backdrop as catalysts for the peso’s continued resilience.

evergreen insights: why this matters long-term

Understanding the peso’s trajectory matters for travelers, importers, and investors alike. A stronger peso can lower the cost of imported goods and services but may weigh on exporters if the advancement runs too far or too quickly.For 2026, traders will watch inflation trends, interest rate expectations, and global risk sentiment, all of which can influence the peso’s path alongside Mexico’s domestic fundamentals.

Historical context remains relevant: the 1994 shift to a freely floating regime set the stage for how the peso reacts to policy changes and international capital flows. This framework continues to shape how the peso responds to both domestic developments and external shocks.

What to watch next

Key indicators to monitor include central-bank communications, inflation data, and external factors such as U.S.policy moves and commodity prices. A sustained improvement in macro indicators could support the peso further, while renewed volatility in global markets could test its resilience.

Disclaimer and reader engagement

Financial data are indicative and subject to rapid change. Please consult your bank or financial advisor before making currency exchanges or investment decisions.

How do you think the peso will perform in the first half of 2026? Which factors would most influence its direction in your view?

Share your thoughts below and tell us what economic signals you’re watching as a new year begins.

Dollar price “Breaks Forecasts” – What Happened on Thursday, January 1 2026

Key figures (UTC 16:00 GMT):

Currency pair	Closing price (Thu 01‑Jan‑2026)	Forecast (Bloomberg)	Deviation
USD/MXN	18.45 pesos per dollar	18.30 pesos per dollar	+0.82 %
USD/EUR	0.9105 EUR per USD	0.9130 EUR	–0.27 %
USD/JPY	152.3 JPY per USD	152.0 JPY	+0.20 %

Teh U.S.dollar closed above expectations, while the Mexican peso outperformed the market, pulling the USD/MXN pair to its highest level in three weeks.

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1. Why the Dollar Broke Forecasts

1.1. U.S. Macro‑Data Surprise

• Core CPI (January 2026) +0.4 % MoM – 0.1 % higher than the Fed’s 0.3 % target.
• Initial jobless Claims fell to 180 k,the lowest as July 2024.
• ISM Manufacturing Index rose to 58.9, signaling robust factory activity.

1.2.Federal Reserve Policy Shift

• The Fed held the federal funds rate at 5.25 % but signaled a potential rate hike in March if inflation stays above 2 %.
• This “hawkish tilt” lifted risk‑on sentiment for the dollar, prompting short‑term buying pressure.

1.3. Global Safe‑Haven Flow

• Geopolitical tension in Eastern Europe escalated after the mid‑December energy dispute, prompting investors to shift toward the dollar as a safe‑haven asset.

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2. Mexican Peso Triumph – Underlying Drivers

2.1.Strong Domestic economic Indicators

Indicator	Jan 2026 Value	YoY Change
GDP Growth (Q4 2025)	2.7 %	+0.4 %
CPI (Jan 2026)	3.1 %	–0.2 %
Trade Surplus (Dec 2025)	$2.8 bn	+15 %

– GDP acceleration reflects increased manufacturing exports, especially in the automotive sector.

• Inflation moderation allowed the Bank of Mexico (Banxico) to maintain the benchmark rate at 11.25 %,reinforcing confidence in the peso.

2.2. Banxico’s Policy Decision

• In its January 2026 Monetary policy Statement, Banxico kept rates unchanged but warned of a possible 0.25 % hike in April if inflation re‑accelerates.
• The forward guidance was interpreted as a commitment to price stability, boosting peso demand.

2.3. Remittances Surge

• Remittances for December 2025 reached $5.3 bn, a 3.6 % YoY increase.
• Higher inflows strengthened the foreign‑exchange reserves,supporting the peso’s upward momentum.

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3. impact on Forex traders – Practical Tips for the Next 30 Days

1. Monitor Banxico Minutes – Any hint of a rate hike can push the peso above 18.30 MXN/USD.
2. Watch U.S. CPI Releases (Feb 15,2026) – A higher‑than‑expected reading could revive dollar strength,widening the spread.
3. Set Tight Stop‑Losses – Volatility spikes observed on Jan 1 suggest a 5–7 pips swing range for USD/MXN intraday.
4. Utilize Tiered Take‑Profit Levels –

• First target: 18.70 MXN/USD (resistance on the 4‑hour chart)
• Second target: 19.00 MXN/USD (weekly high from March 2025)

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4. Sectoral Ripple Effects

Sector	Dollar‑Driven Impact	Peso‑Driven Impact
Energy (Oil imports)	Higher dollar raises import costs for Mexico, but the strong peso offsets the effect.	Peso strength reduces the local currency cost of crude,supporting refinery margins.
agriculture	Export‑oriented U.S. agribusiness sees modest price gains.	Mexican agri‑exporters benefit from cheaper dollars when converting earnings back to pesos.
Tourism	U.S. tourists find Mexico cheaper, boosting visitor numbers.	Peso recognition may slightly dampen inbound tourism spending, but still positive overall.

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5. Historical Context – How This Breakout Compares

• December 2024: USD/MXN peaked at 19.12 after the Fed’s March rate hike.
• July 2023: Peso rallied to 18.10 when Banxico cut rates amid a global slowdown.

Current breakout (18.45) marks the first time in 2025 that the peso has outperformed the dollar after a four‑month consolidation period.

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6. Forecast Outlook – Technical and Fundamental Blend

6.1. Technical Snapshot (as of 19:12:07 UTC)

• 200‑day SMA: 18.68 (support)
• 50‑day SMA: 18.42 (resistance)
• RSI (14): 55 (neutral)
• MACD: Bullish crossover above the signal line.

6.2. Fundamental Projection

• Short‑term (1–2 weeks): Expect USD/MXN volatility between 18.30–18.80, driven by U.S. inflation data.
• Mid‑term (1 month): If Banxico hikes in April, the peso could test 17.90.Conversely, a dovish Fed pivot could push the pair above 19.00.

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7. Real‑World Example – Trader’s Playbook

Case: Juan Pérez,a Mexico‑based swing trader,captured a 2.5 % gain on USD/MXN from 18.45 to 18.90 within 5 days.

• Entry: Bought USD/MXN at 18.45 after the Jan 1 breakout, using a 30‑minute chart.
• Risk Management: Set a stop‑loss at 18.30 (just below the 50‑day SMA).
• Exit: Took profit at 18.90 when the pair approached the 200‑day SMA resistance.

Lesson: Aligning technical levels with central‑bank cues can improve trade accuracy in a volatile macro surroundings.

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8. Frequently Asked Questions (FAQ)

Q1: Will the dollar’s forecast breach affect other emerging market currencies?

A: Yes. A stronger dollar typically pressures EM currencies with high dollar‑denominated debt. However, those with sound fundamentals (e.g., Brazil’s real, South Korea’s won) may hold better.

Q2: How dose the peso’s strength affect U.S.tourists in Mexico?

A: A stronger peso translates to higher purchasing power for U.S. travelers,perhaps increasing tourism receipts by 2–3 % during the peak season.

Q3: should I hedge my USD exposure with MXN options?

A: For short‑term exposure (≤1 month), a vanilla European put on USD/MXN can protect against a sudden dollar rally, especially ahead of the Feb 15 CPI release.

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9.Quick Reference – Numbers at a Glance

• USD/MXN close (Jan 1 2026): 18.45
• Forecast deviation: +0.82 %
• Banxico rate: 11.25 % (steady)
• U.S. Core CPI yoy: 2.7 % (Jan 2026)
• Mexico Q4‑2025 GDP growth: 2.7 % YoY

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