Dollar hits 18.75 pesos as Fed hold fails to calm currency markets

The US dollar opened at 18.75 Mexican pesos on Thursday, October 29, marking a 0.62% increase from the previous close of 18.64 pesos. This move reversed the modest gains the peso had recorded the day before, illustrating the instability in the currency market following the Federal Reserve's decision to hold interest rates steady.

According to Dow Jones data, the greenback accumulated a 0.22% gain over the past seven days. Year over year, the dollar is up 2.18% against the peso. Market volatility currently stands at 6.73%, which is below the standard reference level of 8.05%. Experts suggest this indicates that fluctuations remain relatively moderate compared to typical market conditions.

The recent shift in the exchange rate follows the Fed's choice to maintain its benchmark rate unchanged. While that decision initially supported the peso on Wednesday, analysts warn that the Mexican currency remains vulnerable to external economic factors. On Wednesday, the peso advanced 0.24% and traded at 18.6238 pesos per dollar near the close, driven by a broader global weakening of the US dollar.

Bank of Mexico data showed the closing exchange rate for Wednesday at 18.6261 pesos per dollar, based on the average of banking transactions. In the foreign exchange market, the dollar closed near 18.64 pesos on October 28. For Thursday, Banxico set the official FIX rate at 18.6673 pesos per dollar, a reference used for specific financial obligations that may differ from bank customer rates.

The rate applicable to the payment of dollar-denominated obligations was set at 18.6525 pesos per dollar. Banking institutions report varying prices for buying and selling currency. The average bank rate for purchasing dollars is 18.3808 pesos, while the average sale price is 18.8019 pesos. These discrepancies affect the final amount received by individuals exchanging cash at bank counters.

Among major banks, Scotiabank offered the highest buy price at 18.10 pesos, while Banorte offered the lowest at 17.35 pesos. For those looking to buy dollars, BBVA Mexico provided the lowest sale price at 18.92 pesos. Conversely, Scotiabank offered the highest sale price at 19.30 pesos. These internal bank spreads determine the cost for consumers exchanging physical currency.

Money transfer services present different rates for workers sending funds to Mexico. Western Union quoted 18.23 pesos per dollar, MoneyGram quoted 19.05 pesos, and Wise quoted 18.58 pesos. Recipients should verify the final amount received after commissions are deducted, as the exchange rate alone does not reflect the total cost of the transaction.