Reasons for the Appreciation of the Mexican Peso
- Unexpectedly High Inflation Data: Mexican inflation developed higher than expected, which often leads to an adjustment in monetary policy. Higher inflation can prompt central banks to raise or maintain interest rates to control inflation. This makes investments in the respective currency more attractive, thereby strengthening the Peso.
- Strong Economic Data: In addition to inflation, Mexico’s gross domestic product (GDP) unexpectedly grew robustly by 0.5% in February compared to the previous month (only 0.1% was expected), further boosting confidence in the Mexican economy.
Current Exchange Rate Development
- The Euro-Mexican Peso exchange rate shows fluctuations with a slight appreciation of the Peso against the Euro recently. On May 21, 2025, the rate was about 21.86 MXN per Euro, with an increase of approximately +0.86% on that day.
- During the month of May, the exchange rate fluctuated between about 21.63 MXN to just over 22 MXN per Euro.
Implications for Private Investors and Savers
- Exchange Rate Risks: For investors with investments in Mexico or those with income/expenses in Pesos, an appreciation of the MXN means a reduction in exchange rate losses when converting back to other currencies like the Euro or US Dollar.
- Impact on Consumption: A stronger national currency can make imported goods cheaper and thus increase purchasing power; at the same time, export-oriented companies may suffer competitive disadvantages due to a strong Peso.
- Investment Opportunities: The positive economic development and stable to rising interest rates could make Mexican assets more attractive – whether through direct investments or fund investments.
In summary: The surprisingly positive inflation figures have strengthened the Mexican Peso and present opportunities as well as risks for private investors regarding their portfolios and consumption decisions related to this currency. Active management of exchange rate risks is recommended.