Mexican Peso roars back as Mexico's GDP surprise pushes USD/MXN lower

The Mexican Peso (MXN) stages a comeback against the US Dollar (USD) as the week begins, following last Friday's strong GDP figures. At the same time, traders brace for the outcome of the US elections on Tuesday, even as they digest the latest ISM Manufacturing PMI report. The USD/MXN trades at 18.56, down 1.17%.

USD/MXN tumbles as stronger economic growth and fading Fed hike bets weaken the Dollar

Last Friday, INEGI, Mexico’s National Statistics Agency, revealed that Gross Domestic Product (GDP) expanded 0.9% in Q3 2026 QoQ, above estimates of 0.7% but slower than Q2’s 1.4% growth. On an annual basis, Mexico’s economy grew 3.2%, above economists' estimates of 2.5%.

Regarding this, Mexico’s Finance Minister said that growth could reach the upper end of the government’s forecasts if momentum is sustained.

In the US, the Institute for Supply Management (ISM) Purchasing Managers’ Index (PMI) rose from 54.5 to 55.5 in October, beating forecasts of 54.6. Although the data hints at overall economic strength, money markets trimmed the chances of a 25-basis-point rate hike from 80% a week ago to 77%, according to the CME FedWatch Tool.

This could be attributed to Oil prices diving amid rising hopes for a resumption of peace talks between the US and Iran. News of a breakthrough in negotiations has arisen, and both sides are closing in on a preliminary agreement.

USD/MXN traders are also focused on US mid-term elections. According to Polymarket, the Democrats have a 75% chance of controlling the US Senate, and a 96% chance of controlling the US House of Representatives.

USD/MXN Price Forecast: Technical outlook

In the daily chart, USD/MXN trades at 18.5752, extending its advance well above the moving average triple (50-, 100- and 200-day simple moving averages) clustered near 17.7802, which reinforces a bullish near-term bias. The pair is pushing further away from the long-standing downward resistance trend line drawn from 21.0808, suggesting that the broader recovery phase remains intact, while the 14-day Relative Strength Index has cooled toward 58.6 from overbought readings, hinting at still constructive but less aggressive upside momentum.

On the topside, the primary obstacle is the descending resistance trend line that continues to cap the broader structure above the market, and any clear rejection there could slow the rally. On the downside, initial support is seen at the moving average triple around 17.78, before the horizontal floor at 16.89, where buyers would be expected to re-emerge on deeper corrective dips.