The MND Peso Index™ for October: Is the peso approaching its fair value?
For the first time in six months, the MND Peso Index™ suggests that the USD:MXN exchange rate in early October — compared against prices for goods in various Mexican cities and in Dallas, Texas — undervalued the Mexican peso against the dollar. The post The MND Peso Index™ for October: Is the peso approaching its fair value? appeared first on Mexico News Daily
The MND Peso Index™ for October 2026 indicates that the Mexican peso is currently undervalued against the US dollar by 0.7%. This is a significant shift from the overvaluation status that the currency held in September. The index, which tracks the exchange rate people actually experience, is a monthly purchasing power parity measure that compares the prices of a standardized basket of 20 goods and services in Mexico and Dallas, Texas.
Since its launch in May 2026, the index has shown the peso undervalued in four of the five months, with the most recent undervaluation assessment being 6.5 percentage points lower than the overvaluation in September. The peso's depreciation, falling from 16.98 to 17.97 per US dollar between September 2 and October 6, was the primary driver behind this change.
Factors contributing to the peso's depreciation include the Federal Reserve's interest rate hike and increased investor risk aversion. While the peso's undervaluation assessment in October is minimal, indicating it is trading close to fair value, the shift from overvaluation to slight undervaluation highlights the currency's volatile performance in 2026, which has seen it depreciate around 2% against the US dollar so far.
Written by urgent.news from Mexico News Daily's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
