Mexican Peso Weakens to 2-Week Lows

The Mexican peso weakened to around 18.75 per USD in early September, marking a two-week low as a firmer US dollar combined with softer domestic flows and a Banxico policy path that looks increasingly gradual. Remittances, a key source of dollar supply, fell 4.7% in July from a year earlier, extending a four-month streak of declines and removing a structural tailwind that had supported the peso earlier in 2025. At the same time unemployment edged up to 2.8% in July from 2.7% in June, a modest softening that cools consumption and reinforces the case for further easing. The central bank has started a measured easing cycle, cutting 25bp to 7.75% and signalling a slow, data dependent glide path, which reduces interest rate carry trade appeal. Meanwhile the greenback has been holding near late August highs, adding further pressure on the Mexican currency.