What it is
The currency of Mexico. It floats freely, trades around the clock and is one of the more liquid currencies of the developing economies, which is why it is often used to express a view on emerging markets as a whole.
Who issues it
Banco de México, known as Banxico, issues the peso and sets the target for the overnight interbank rate through its Governing Board. It has been autonomous of the government since 1994.
How it is commonly described
- Emerging market
- Issued by a developing economy; usually a thinner market, with wider spreads and larger swings.
- Risk-sensitive
- Commonly rises when investors are confident and falls when they are cautious.
Mexican interest rates have usually been well above those of the United States, which draws in money looking for yield when markets are calm and sees it leave when they are not.
These are descriptions people use, drawn from how the currency has commonly behaved. They are not promises about how it will behave.
What typically moves it
- The US economy and the trade rules between Mexico, the United States and Canada
- Banco de México policy, and the gap between Mexican and US interest rates
- Risk appetite towards emerging markets
- Money sent home by Mexicans working abroad
- The price of oil
These are the things people who follow this currency usually watch. They explain how the market works; they do not say what the exchange rate will do next.
The scheduled releases to know
- Monetary policy announcementPublished by Banco de MéxicoExplainer: Rates
- National Consumer Price Index, published twice a monthPublished by INEGIExplainer: CPI
- Gross Domestic ProductPublished by INEGIExplainer: GDP
- US employment and inflation releases, read for Mexico’s largest marketPublished by Bureau of Labor StatisticsExplainer: NFP
No dates or figures are shown here: each publisher’s own calendar is the authority. The explainers are in Economic Events; a release without a link has no explainer on this site yet.
Its main session
New York. Mexico shares the North American business day; the peso is busiest in New York hours.
At GIO4X
A short history
The peso descends from the Spanish silver dollar, the “piece of eight”, which was used in trade across the world for centuries. In 1993 a new peso replaced the old one, removing three zeros. The peso was floated in December 1994, during the crisis remembered as the Tequila crisis, and Banco de México became autonomous in the same year.
Words worth knowing
A reference page. Educational information, not investment advice or a recommendation to trade. It gives no exchange rate, no interest rate and no forecast.