Peso Rises 0.57% to 18.56 Against Dollar Despite Broad Strength in U.S. Currency
Key Facts
The dollar fell 0.57% against the Mexican peso to 18.56 on October 26, with the Mexican currency rising despite broader U.S. dollar strength, according to an FXStreet report. The report attributed the move to improved risk appetite and a rise in U.S. technology stocks after Anthropic filed for its initial public offering. The pair closed at 18.543 in EL7 daily data, compared with a close of 18.6984 on October 25. The pair’s decline means the dollar bought fewer pesos at the close, in a move consistent with the Mexican currency’s gains cited by the report. The move stood out at a time when broad dollar strength was not enough to push the pair higher.
FXStreet also linked improved risk appetite to diplomatic developments related to the conflict between the United States and Iran. The report cited speculation that talks involving Iran, Turkey, Pakistan and Saudi Arabia, the member countries of the “Mecca Agreement,” could help resolve the conflict. But it reported that an Iranian official said nuclear talks were unlikely, a constraint that defines the scope of what was on the discussion table. The report therefore addressed the possibility of talks and their course; it did not announce an agreement or an existing settlement. The news came alongside a rise in U.S. technology stocks, explaining the improved risk appetite that the report attributed to the peso’s gains.
On U.S. monetary policy, FXStreet reported that markets were pricing in a 9% probability that the Federal Reserve would raise interest rates at its meeting in October. The priced probability of a rate increase in December was 83%, down from about 90% the previous week. These figures show that market estimates of the likelihood of a December increase fell over the week, while the October probability remained at a lower level. The report cited these expectations as part of the market backdrop, alongside the dollar’s strength and the direction of technology stocks. This did not change the fact that the pair fell on the same day, while the peso’s gains were attributed to improved risk appetite and the factors cited by the report.
Mexico’s economic data provide additional context ahead of figures due this week. Gross domestic product grew 1.4% quarter on quarter in the second quarter of 2026, following a revised contraction of 0.3% in the first quarter, while annual growth was 2.1% in the second quarter, according to Reuters via Investing.com. The National Institute of Statistics and Geography said the economic activity index rose 0.6% month on month and 3.5% year on year in August. For September, the leading indicator for economic activity estimated annual growth of 3.7% and a monthly increase of 0.1%. These readings put the upcoming growth and trade data in the context of a quarterly recovery in the second quarter, alongside estimates of stronger annual activity in September than the reading recorded in August.
In trade, Mexico’s merchandise exports rose 40.4% year on year in August 2026, while imports increased 34.2%, according to the National Institute of Statistics and Geography. The trade balance recorded a surplus of $605 million that month, following a deficit of $848 million in July. This comparison provides direct context for the preliminary September trade data scheduled for release on October 27. The institute is due to publish merchandise trade balance figures on that date, among the near-term indicators being monitored for the Mexican economy. They will be followed on October 30 by the preliminary estimate of third-quarter GDP, rather than a separate set of quarterly and annual growth rates.