When entering Mexico, you are allowed to bring up to $300 US, or the equivalent in other currencies, in cash. For anything more you are supposed to pay a duty. It is a bit confusing on the customs form because there is a separate question that asks if you have more than $10,000 cash.
US Dollars and Mexican Pesos
In Cancun, the US dollar is widely accepted. However, most prices are quoted in Mexican pesos. This can lead to sticker shock when you see a restaurant main course for $35.00. Usually, any price that has a decimal sign is in pesos. Pesos can also be indicated by a price like "N$35". The N stands for "new pesos".
If you see a bill with a high value, in the thousands or millions, that is "old pesos" and you have to chop three zeros from the number to get the true value.
The exchange rate for pesos fluctuates daily, however the best rate will be for US dollar exchange over Canadian and Euros. There are money exchange places all over the place; those in the hotels or right next to them give worse rates than those downtown.
Determine the conversion of any currency to Pesos with this online currency converter.