Mexican Peso Rebounds on Tariff Relief Hopes

After five consecutive losing sessions, the Mexican peso appreciated on Tuesday as investors braced for the announcement of U.S. reciprocal tariffs.

The exchange rate closed at 20.3331 pesos per dollar, strengthening from 20.4604 in the previous session, according to official data from Banco de México (Banxico). This movement represented a 12.73-cent gain (0.62%) for the peso.

During the session, the dollar traded between 20.4477 and 20.3321 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, edged up 0.03% to 104.22 points.

Global Focus on Trump’s Announcement

Markets are closely watching Donald Trump’s announcement on Wednesday, where he will reveal the full scope of his “Liberation Day” tariffs, specifying affected countries, industries, and the scale of the duties.

The peso’s performance suggests that Mexico may be among the least affected nations, as investors speculate that an agreement could exempt all USMCA-covered products from tariffs. If this expectation is confirmed, the peso could strengthen further, potentially breaking below the 20.00 level. However, if Mexico fails to secure significant concessions and retaliates, the exchange rate could climb toward 21.00 pesos per dollar.

Mexico and Canada Strengthen Ties

Amid growing tensions, the office of newly appointed Canadian Prime Minister Mark Carney reported that he spoke with Mexican President Claudia Sheinbaum Pardo about a coordinated response to U.S. trade measures.

Sheinbaum confirmed that Mexico’s official stance will be announced on Thursday, April 3, if Trump proceeds with the tariffs. She also expressed a willingness to cooperate on sensitive bilateral issues, including the extradition of alleged drug traffickers.

Meanwhile, markets are also awaiting Mexico’s 2026 economic policy guidelines, set to be released later on Tuesday, which will provide government projections for key macroeconomic indicators.