Washington, January 16, 2026 – the Mexican peso is surging, hitting its strongest level since July 2024, as global markets recalibrate amid shifting trade dynamics and currency interventions. This unexpected strength underscores a broader trend of consolidation across major currencies,even as geopolitical factors continue to stir uncertainty.
Currency Markets in Flux
Investors are closely watching central bank signals and economic data for clues about the next moves in a volatile market.
- The Mexican peso is leading gains among emerging market currencies.
- Japanese officials are stepping up verbal intervention to support the yen.
- US economic data, particularly December industrial output, will be a key focus today.
- Ford is reportedly in talks with China’s BYD for battery supply.
The US dollar is softer against all the G10 currencies, but the general consolidation seen this week continues. Japanese officials continued their verbal intervention, and with the US holiday on Monday, the risk of material intervention is seen as greater, and some yen shorts have covered. News that Machado has given the Nobel Peace Prize she was awarded to President Trump is being broadly criticized.
G10 Currencies
• The euro was sold slightly through $1.1595 yesterday, its lowest level since the end of November, but held above the 200-day moving average (~$1.1590 today). It has not closed below this level since last March. The euro is currently holding above $1.1600, but hasn’t recovered above $1.1625. Options for 2.4 billion euros at $1.16 expire today. A weekly close below $1.1600 could target $1.1550 next.
• The Japanese yen stabilized yesterday and has strengthened slightly today as Japanese officials extended their verbal intervention, threatening material action. The greenback frayed JPY158 for the first time in three sessions. Options for $2.12 billion at JPY158 expire today. Some speculate intervention could materialize on Monday when the US is on holiday, though skepticism remains as verbal intervention has already arrested the yen’s slide.
• The British pound slipped through $1.3365 yesterday, a level not seen since December 19, meeting a 38.2% retracement objective of the rally from the November 21 low (~$1.3040). It has rebounded today, attempting to re-establish a foothold above $1.3400. GBP800 million of options at $1.3425 expire today. A push through $1.3440 would lift the technical tone; otherwise, the next retracement target is near $1.33.
• The US dollar approached last week’s high against the Canadian dollar yesterday, reaching CAD1.3920, slightly shy of the 61.8% retracement of the greenback’s slide as november 21 (~CAD1.4130). The greenback is consolidating in a 15-tick range below CAD1.3900. Yesterday’s low was slightly below CAD1.3880, and a close below it would signal the US dollar rally off the CAD1.3645 area on Boxing Day may be tiring.
• The Australian dollar’s base around $0.6660 held yesterday, and it recovered to settle near Wednesday’s high. This is considered a bullish techni
• Last year, the US lost 72,000 manufacturing jobs.
• Canada’s December housing starts and November portfolio capital flows are due today. Housing starts are expected to have risen for the second consecutive month,up about 4% for the year through November. Meanwhile, foreign appetite for Canadian stocks and bonds waned in 2025, with foreign investors buying about C$100.5 billion of Canada’s paper assets in the first 10 months of 2025, compared with C$165.7 billion in the Jan-Oct 2024 period.
