Mexican peso recovers after Banxico's surprise rate cut as Latam markets firm
Latin American stocks and currencies edged up on Friday, while the Mexican peso recovered from Banxico's surprise 25bp cut, according to Reuters.
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what happened
Latin American stocks and currencies inched higher on Friday and were set to close the week on a firm note. Investors weighed the US midterm results, a robust American jobs report and signals from regional central banks, Reuters reported. The MSCI Latam currency gauge was little changed and looked set for a second weekly decline. The regional equity index rose 0.6% but was slightly lower for the week.
Mexico's peso gained 0.6%, partly reversing Thursday's losses after Banxico delivered an unexpected 25-basis-point rate cut. The bank described the move as a one-off correction. Analysts linked the currency's rebound to hopes that any changes to the USMCA trade pact would face tougher scrutiny in Congress after the midterms, easing worries about trade with the top export market. Juan Perez of Monex said any amendments to USMCA must pass through Congress and that White House support would meet strong resistance. He called this very good news for both countries and for the peso, outweighing the looser monetary stance.
Brazil's real was flat against the dollar. The central bank paused its easing cycle on Wednesday and held rates steady as its inflation outlook worsened. The Bovespa gained 1.2%. Separately, a stronger-than-expected US jobs report boosted bets on a Federal Reserve rate hike next month, and the dollar climbed 0.8% against a basket of currencies.
why it matters
Strong US payrolls push back against expectations of Fed easing and lift the dollar, a headwind for emerging-market currencies. The USMCA debate supports the peso, while tech shares fell on worries about tighter oversight of AI infrastructure spending under a Democratic-led Congress.
market impact
Peso and regional FX: USMCA hopes support the Mexican currency, strong US jobs data pressure EM currencies
- Mexican peso pressure up — hopes that USMCA changes will face tougher scrutiny in Congress
- US dollar pressure up — strong jobs data reinforce expectations of a Fed rate hike
tags
instruments
on polymarket
sources
- Latam stocks, currencies gain; Mexico peso rebounds after Banxico cut — Reuters, 6 November 2026 at 20:02 UTC
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