Peso Surges to Six-Month High as Interest Rates Remain Unchanged

Mexico's currency has been on a strong run lately, and Thursday was no exception. The Mexican peso gained 0.12 percent against the US dollar in trading, extending its winning streak to 10 consecutive days. This rally comes after the central bank left interest rates unchanged at its August 6 monetary policy meeting.

The peso's strength continued into Friday morning, with it dipping below 17.14 against the dollar - a new high not seen since February 23. Analysts attribute this appreciation to the negative US jobs report and the central bank's decision to hold interest rates steady.

According to Forbes México, the peso is on pace to appreciate by 1.3 percent by the end of the week. This gain can be attributed in part to the carry-trade strategy, where investors borrow money at low interest rates in countries like the US and Japan, then invest it in higher-yielding assets or currencies.

Gabriela Siller, director of analysis at Grupo Financiero BASE, noted that large global investors are borrowing in the US and Japan, then investing in Mexico. This is due to Mexico's wide interest rate differential - its 6.50 percent policy rate compares favorably to the US Federal Reserve's 3.50-3.75 percent target range.