2026.03.1219:00:23UTC+00Mexican Peso Tests Yearly Lows

The Mexican peso weakened toward 17.83 per US dollar on Thursday as mounting energy shocks and defiant rhetoric from Tehran renewed safe-haven demand for the greenback. The move followed a statement by Mojtaba Khamenei that the Strait of Hormuz would remain closed, prompting markets to reprice global inflation risks.

Domestically, the Bank of Mexico is contending with annual inflation rising to 4.02% in February, breaching the 4% upper bound of its target range for the first time in nearly a year. The acceleration was fueled by sharp increases in processed food prices and a 9.88% jump in fruit and vegetable costs, while core inflation remains persistently high at 4.5%.

These developments have substantially reduced the odds of an interest rate cut in March and strengthened expectations that the easing cycle will be paused with a hawkish bias. Although higher oil prices support Mexico’s fiscal position, the peso remains exposed to broader risk-off sentiment as geopolitical tensions intensify and the prospect of 10% global import tariffs weighs on the country’s export outlook.