Mexico’s Peso Hits 7-Year Record High Against U.S. Dollar Noe Torres - Reuters
go to original May 17, 2023

When the U.S. dollar falls in value against the peso, we often forget that many Mexican families are being supported by U.S. dollars — through remittances. (Angy Márquez/Mexico News Daily)

Mexico's peso currency flexed its muscle this week to reach its highest value against the U.S. dollar in seven years, following nearly two years of interest rate hikes aimed at taming inflation that has seen consumer prices edge down.

Some analysts chalk up the peso's latest gains, however, as mostly the flip side of a weakening greenback.

The peso gained 0.95% on Monday to trade at 17.42 pesos per dollar, its strongest level since May 2016.

Over the last few years, the Mexican currency has mostly hovered around 20 pesos per dollar, but over the past year it holds the distinction of the currency that has gained the most against the U.S. dollar, or up nearly 11%.

President Andres Manuel Lopez Obrador repeatedly touts the peso's strength as evidence of sound macroeconomic policies, especially his administration's budget austerity and pledge to avoid taking on new debt.

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Related: The Superpeso Rollercoaster: Not Just a Ride for Expats (Mexico News Daily)