Mexican Peso struggles in early December as US Dollar holds firm

Mexican Peso drops 0.37% as November Business Confidence in Mexico worsens, signaling economic slowdown.

A Banxico survey shows inflation likely to stay below 4%, but the economy will miss expectations of growth above 2% in 2024.

US Dollar supported by stronger ISM Manufacturing PMI and Trump’s tariff threats, overshadowing weak economic data.

The Mexican Peso begins December on the back foot against the Greenback. The Peso is down by 0.37% amid a busy economic calendar on both sides of the border. Mexico’s economic docket featured Business Confidence for November, while the US schedule showed that business activity continued to improve despite remaining in contractionary territory. The USD/MXN trades at 20.44.

The Instituto Nacional de Estadistica Geografia e Informatica revealed the Business Confidence Index in the manufacturing sector, which dipped and posted its worst reading since September 2024. Following that data release, the Bank of Mexico (Banxico) revealed its latest monthly survey of economists, including forecasts from 40 analysts.

Most economists suggest that headline inflation will remain below 4%, while core inflation is expected to continue its downtrend and stall in 2025. The economy is expected to slow further, with the Gross Domestic Product (GDP) forecasted to end the year below 2.00%, as foreseen in Q2 2024. The USD/MXN exchange rate is expected to remain above the 20.00 figure by the end of the year.