Mexican Peso Falls Over 1% Against the Dollar
The local currency declined after recovering ground yesterday in a volatile session marked by the U.S. President Donald Trump’s decision to delay tariffs on Mexico and Canada.
The Mexican peso weakened against the dollar in Tuesday’s session. After a brief recovery the previous day, the currency faced renewed pressure following the postponement of U.S. tariffs on Mexico and Canada.
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The exchange rate closed at 20.5560 pesos per dollar, according to data from the Bank of Mexico (Banxico). Compared to LSEG’s reference price of 20.3307 from the previous day—when there was no official reference due to a holiday—the peso lost 22.53 cents, or 1.11%.
The dollar traded within a range of 20.5996 at its highest and 20.3156 at its lowest. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, fell 0.43%, reaching 107.94 points.
Recent Developments and Outlook
The dollar weakened against major currencies after the U.S. imposed a 10% tariff on Chinese imports. However, the USD/MXN depreciated amid increased risk aversion, despite the temporary suspension of tariffs on Mexico.
On Saturday, Washington confirmed a 25% tariff on all products from Mexico and Canada, along with a 10% tariff on Chinese goods. However, by Monday, the U.S. had reached agreements with its North American neighbors to delay implementation for a month, while the tariffs on China remained in effect.
Despite the temporary relief from the tariff suspension, the peso remains under pressure, with expectations of further depreciation in the short term. Investors in Mexico are also closely watching upcoming economic events, including Banxico’s first monetary policy decision of the year on Thursday and the key January inflation report on Friday.
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