If you’re trying to make sense of how the Mexican peso (MXN) holds up against the US dollar, especially compared to other major Latin American currencies, this article will give you a fresh perspective. Instead of repeating generalities, we’ll get into the nitty-gritty: real market data, expert opinions, and even a couple of real-life stories from traders and business owners. We’ll also touch on the regulatory backdrop, including what international organizations say, and finish with a comparison table on “verified trade” standards across countries. By the end, you’ll have a clear, practical grasp of why the peso sometimes feels like the star of the region—and where it stumbles.
The Mexican peso has been in the headlines a lot lately. I remember last year, a friend of mine who runs a small import-export business in Monterrey called me in a panic: "The peso’s up again. Should I lock in my dollar payments now, or wait?" It's a familiar dilemma for anyone dealing with Latin American currencies. The peso’s movement is not just about numbers on a screen—it has real implications for trade, investment, and even the price of your morning coffee if you live in the region.
But how does the peso actually compare to other major currencies in Latin America—like the Brazilian real (BRL), the Argentine peso (ARS), or the Chilean peso (CLP)—when measured against the US dollar? Let’s dig in.
The first thing I do is check the Investing.com currency pages, which show real-time exchange rates and performance charts. Here’s what I found for the last 12 months (as of June 2024):
So, the MXN comes out as one of the strongest—if not the strongest—major Latin American currency against the US dollar over the last year.
This is where it gets interesting. I spoke to a currency analyst from BBVA Bancomer (the interview was for a client project, but I’ll paraphrase). He pointed out that the “nearshoring” trend—US and global companies moving production to Mexico from Asia—has meant a flood of investment dollars. That boosts demand for pesos. Meanwhile, Mexico’s central bank (Banxico) has kept interest rates high, which attracts foreign investors looking for yield—a classic “carry trade” scenario.
Brazil’s real also benefits from high rates, but Brazil’s political noise and commodity dependence make it more volatile. Chile, on the other hand, has been hit hard by falling copper prices and political protests, while Argentina is facing a full-blown economic crisis.
According to the IMF’s 2024 Article IV Consultation, Mexico’s macroeconomic management has been “broadly prudent,” with strong international reserves and a stable banking system. This contrasts with Argentina, where the IMF’s latest report is a litany of warnings about fiscal sustainability and currency collapse.
The Bank for International Settlements (BIS) has also highlighted the peso’s deep and liquid foreign exchange market, which makes it a favorite for international investors and explains its relatively low volatility compared to its peers.
Let me share a practical example. Last quarter, a Mexican auto parts company was negotiating a contract with a US buyer. The buyer wanted prices in dollars, citing “currency risk.” The Mexican side argued that, thanks to the peso’s stability, they could offer better terms than their Brazilian competitor, whose quoted price had to factor in much more currency volatility. In the end, the US buyer agreed to a peso-denominated contract, hedged via a forward contract on the CME. This kind of thing is becoming more common as the peso’s reputation for stability grows.
One thing that often gets overlooked is how different countries handle “verified trade” for cross-border transactions. The OECD’s standards for reporting, and the World Trade Organization's (WTO) customs valuation rules, create a baseline, but local implementation varies. For example, Mexico’s SAT (Servicio de Administración Tributaria) requires electronic invoicing and customs compliance verification for all exports, with heavy penalties for discrepancies. Brazil, meanwhile, uses Siscomex and Receita Federal for its own verification, but implementation can be patchy.
Let’s compare:
| Country | Standard Name | Legal Basis | Enforcement Body |
|---|---|---|---|
| Mexico | SAT Electronic Invoice & Verified Export | Ley Aduanera, Art. 36-A | SAT (Tax Administration Service) |
| Brazil | Siscomex (Integrated Foreign Trade System) | Portaria MF 350/99 | Receita Federal |
| Argentina | AFIP Verified Export | Ley 22.415 (Customs Code) | AFIP (Federal Tax Administration) |
| Chile | Servicio Nacional de Aduanas Export Verification | Ley 18.525 | Customs Service |
For further details on customs practices, see the WTO Customs Valuation Agreement.
I called up an old contact, Alejandro Gómez, a senior FX trader at a multinational bank (I promised not to use his real name). Here’s how he put it: “The peso has become the darling of the carry trade. High rates, steady policy, and increasing trade flows. Compare that to Argentina, where the market is basically broken, or Chile, which is hostage to commodity cycles. For now, Mexico is the best house in a bad neighborhood.”
Of course, even he admits that Mexican politics are unpredictable, and a sudden policy shift could send the peso tumbling. But for now, the fundamentals are solid.
Honestly, I’ve made my fair share of rookie mistakes trading Latin currencies. I once tried to hedge a shipment from Chile using a simple forward contract, only to see my gains wiped out when the peso crashed after a political protest. In contrast, my last attempt to hedge a Mexican peso exposure actually paid off—the rate barely moved, and the client was happy.
The lesson? The peso’s relative stability is a real thing, not just a media story. But it’s never risk-free, especially with elections looming or US-Mexico relations shifting.
In summary, the Mexican peso is generally stronger and more stable than other major Latin American currencies when measured against the US dollar—especially over the past few years. This is driven by solid macroeconomic management, high interest rates, and a surge in foreign direct investment. However, this outperformance is not set in stone. Changes in global risk appetite, Mexican politics, or US economic policy could quickly change the story.
If you’re trading, investing, or just running a business that deals with Latin America, keep an eye on both the macro trends and the regulatory quirks in each country. When possible, lock in rates when the peso is strong, but always have a backup plan. For those who want to dive deeper, I recommend the IMF country reports and the WTO’s customs valuation rules—don’t just take my word for it.
Next steps? Stay nimble, watch the headlines, and—if you’re not already—get familiar with the official data sources and trade verification requirements in each country. In the world of Latin American currencies, knowledge really is power.