The Mexican peso strengthened to about 16.89 per US dollar in September, its highest level since May 2024. US nonfarm payrolls rose by 162,000 in the latest month, far exceeding market expectations of a 56,000 increase. These figures confirm ongoing strength in the US labor market, which is supportive for Mexican exports and overall economic activity, given the close trade ties between the two countries.
At the same time, the trade dispute between the US and Canada, along with broader trade tensions involving other partners, has left Mexico in a relatively advantageous position in trade terms, even though it has also faced tariffs. Domestically, Mexico’s gross fixed investment increased 7.7% year-on-year in June, beating forecasts for a 4.8% rise.
However, while robust US jobs data underpins economic stability, it has also reinforced expectations of a Federal Reserve rate hike in September. Such a move would likely support the US dollar and narrow the interest-rate differential between the US and Mexico.