USD to MXN Historical Exchange Rates

The USD/MXN exchange rate has gone through several dramatic chapters. In the 1994 "Tequila Crisis," the peso lost roughly half its value after the Mexican government abandoned its fixed exchange rate band. The crisis prompted a $50 billion international bailout and led to the free-floating regime that exists today.

More recently, the peso hit all-time lows against the dollar in early 2020 when the COVID-19 pandemic triggered a global flight to safety. The rate briefly topped 25 MXN per dollar before recovering as risk appetite returned and Banxico maintained relatively high interest rates.

Federal Reserve policy consistently moves this pair. When the Fed raised rates aggressively in 2022 and 2023, the dollar strengthened globally — but the peso held up better than most emerging market currencies because Banxico had started its own tightening cycle earlier. The interest rate differential made the peso attractive for carry trades, where investors borrow in low-rate currencies and park money in high-rate ones.

Trade policy also leaves its mark. The renegotiation of NAFTA into the USMCA (United States-Mexico-Canada Agreement) in 2018-2020 created uncertainty that weighed on the peso. Since the deal was ratified, more stable trade expectations have provided a floor of support. Meanwhile, nearshoring trends — manufacturers moving supply chains closer to the US market — have boosted foreign direct investment into Mexico, adding another pillar of peso demand.