Mexican Peso Drops as Strong US Jobs Data Bolsters Dollar

MEXICO CITY, Mexico — The Mexican peso weakened on Friday, January 10, 2025, as the U.S. dollar gained strength globally following the release of robust U.S. employment data. The peso’s depreciation comes amid expectations that the Federal Reserve will delay interest rate cuts this year.

The spot exchange rate reached 20.6360 pesos per dollar, marking a 0.67% decline from the previous day’s close of 20.4982 pesos, according to data from the Bank of Mexico (Banxico). The dollar traded within a range of 20.4817 to 20.7036 pesos during the session.

The U.S. Department of Labor reported that non-farm payrolls increased by 256,000 jobs in December, surpassing analysts’ expectations of 212,000. The unemployment rate also dropped to 4.1%, down from 4.2% in November. These figures have led traders to speculate that the Federal Reserve will wait until at least June to cut interest rates, revising earlier predictions of a May reduction.

Market analysts attribute the peso’s decline to the dollar’s broader strength, as measured by the Intercontinental Exchange‘s U.S. Dollar Index (DXY), which rose 0.34% to 109.54 units. The index tracks the dollar against a basket of six major currencies.

Additionally, concerns over the implications of Donald Trump‘s upcoming presidential term, set to begin on January 20, have weighed on the peso. The currency has now recorded four consecutive days of losses, with a moderate decline over the week.

“The strong U.S. jobs data has reinforced the dollar’s position, putting pressure on emerging market currencies like the peso,” said a market analyst. “Investors are also cautious about potential policy shifts under the new U.S. administration.”