CHF/MXN settles above 6-week low, posts weekly loss

The CHF/MXN currency pair settled above recent low of 22.9761, its weakest level since April 3rd, in the wake of the Mexican central bank’s policy decision and the latest GDP growth data out of Switzerland.

Banco de México lowered its key policy rate by 50 basis points to 8.50% at its May meeting, since Mexico’s annual inflation slowed to 3.93% in April, while the local economy grew 0.2% quarter-on-quarter in Q1 of 2025 following earlier weakness.

The central bank indicated that it could continue with similar 50 bps reductions, as the disinflation process is expected to allow some further monetary easing.

Still, Banco de México said it would proceed with caution amid elevated global uncertainty (ranging from trade tensions to geopolitical conflicts), which could either reignite inflation through Peso depreciation or lead to deeper economic slowdown.

At the same time, Switzerland’s economy grew 0.7% quarter-on-quarter in Q1 of 2025, a preliminary estimate showed, following a revised up 0.5% growth in Q4 of 2024.

It has been the strongest rate of economic expansion since the first quarter of 2023, mostly underpinned by robust activity in the services sector.

Meanwhile, the Swiss government has been working on strengthening its trade ties with the US in an effort to avoid potential tariffs. According to Finance Minister Karin Keller-Sutter, recent talks with Fed Secretary Scott Bessent were “constructive” and there is potential for a bilateral trade agreement similar to the one established between the US and the UK.

The CHF/MXN currency pair settled 0.34% lower at 23.2395 on Friday.

The exotic Forex pair lost 0.59% for the week.