Mexican Peso Surges Following Tariff Relief on Automobiles
The Mexican peso gained ground against the U.S. dollar in Wednesday’s trading, easing concerns over U.S. tariff policies after the White House announced a one-month exemption for auto manufacturers.
The exchange rate closed at 20.3568 pesos per dollar, strengthening from 20.7431 pesos the previous day, according to official data from the Bank of Mexico (Banxico). This represents a gain of 38.63 cents, or 1.86%, for the peso.
The dollar fluctuated between a high of 20.6659 and a low of 20.3458 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, dropped 1.18% to 104.30 points.
Tariff Relief Sparks Market Optimism
The White House confirmed Wednesday that auto imports from Canada and Mexico would be exempt from tariffs for one month. Additionally, it noted that President Donald Trump is open to discussing further tariff exemptions.
Amid this economic uncertainty, Mexican President Claudia Sheinbaum announced plans to engage with Canada and other trading partners to address U.S. tariffs and explore greater trade diversification.
U.S. Commerce Secretary Howard Lutnick had hinted at a tariff-related announcement on Tuesday, contributing to the peso’s gains after the dollar hit a two-year high earlier in the session.
Volatility Remains a Concern
Lutnick’s comments on potential tariff relief fueled risk appetite, while the latest exemption under USMCA (T-MEC) further strengthened the peso, pushing the dollar down to 20.3458 pesos.
Despite this temporary relief, analysts warn that further market pressure is likely. Trump’s unpredictability remains a key risk factor, potentially driving currency volatility in the near future.
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