Mexican peso outperforms U.S. dollar

17 Sep 2020

Last week, the Mexican peso was seen gaining 1.67%, hitting its highest level since mid-March.

The Mexican currency had not reached such levels since the very early stages of the coronavirus pandemic, that shortly after caused widespread shutdowns and massive economic downturn.

At its trading peak on Wednesday, the peso hit 21.3974 per dollar, its best performance since March 13, amid other emerging market currencies which were also lifted by a decline in the greenback.

Analysts believe that if the local currency keeps up this pace, it could rebound even further to 20.90 units against the dollar in future trading sessions. 

The advancements in the Mexican currency arrived on the backdrop of hopes of a coronavirus vaccine being made available worldwide soon.

Mexico registered its first coronavirus cases in late February. A month later, it had imposed a nationwide shutdown of non-essential sectors; a move which battered economic growth. 

The central bank said in a worst-case scenario, it expects the economy could contract up to 13% this year. The government’s outlook was slightly more upbeat however, forecasting the economy would shrink by a milder 8%.