Peso posts longest weekly losing streak since 2019 after rating downgrade
The peso began the week at around 18.50 per US dollar. Banxico's FIX reference rate for Monday was 18.4930.
According to El CEO, last week was the peso's sixth weekly loss in a row, its longest losing run since mid-2019.
On Oct. 15, HR Ratings cut Mexico's sovereign credit rating from BBB+ to BBB, citing weaker public finances and slower growth.
Uncertainty over trade talks with the US and a narrowing gap between Mexican and US interest rates are adding to the pressure.
The Mexican peso opened the week close to 18.50 per US dollar. According to El CEO, the currency has now lost ground for six weeks in a row, its longest losing streak since July–August 2019. The Bank of Mexico's FIX reference rate, published Monday in the official gazette (DOF), was 18.4930 pesos per dollar.
Analysts point to a credit rating downgrade as a key factor. On Oct. 15, Mexican agency HR Ratings lowered the country's long-term sovereign rating from BBB+ to BBB with a stable outlook, and gave Pemex the same downgrade. Bloomberg Línea reported that HR expects the 2026 public-sector deficit to reach 4.6% of GDP and public debt to rise from 54.5% of GDP at the end of 2026 to 61.2% by 2030. HR forecast 1.3% growth this year, below the 1.5% projected by the Finance Ministry. The ministry responded that Mexico keeps an investment-grade rating with all eight agencies that rate its debt.
Interest rates are also weighing on the peso. Banxico kept its benchmark rate at 6.5% in September. At the same time, analysts cited by El CEO say investors expect tighter monetary policy in the United States, which shrinks the extra return that has made the peso attractive to carry traders.
Trade is another source of uncertainty. Citing the Wall Street Journal, Mexico News Daily reported last week that talks on US tariffs on Mexican vehicles (25%) and steel and aluminum (50%) had stalled. Officials from both countries have denied this.
Sources: El CEO, Bloomberg Línea, Potosí Noticias (Banxico FIX), El Financiero, Mexico News Daily.