Mexican Peso Holds Steady Ahead of Central Bank Announcement
After weakening earlier in the session, the Mexican peso stabilized on Wednesday as market attention remained focused on U.S. President Donald Trump and his threats, which have weighed on risk assets.
The exchange rate closed the day at 20.5560 pesos per dollar, unchanged from the previous session, according to official data from Banco de México (Banxico). This reflects the market’s cautious stance toward the local currency.
Throughout the session, the dollar traded in a range between a high of 20.7146 pesos and a low of 20.4650 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, declined 0.35% to 107.62 points.
While agreements with Mexico and Canada halted the implementation of 25% U.S. tariffs on their goods, the Trump administration did impose a 10% tariff on China, which responded by raising tariffs on several U.S. products from 10% to 15%.
Market Awaits Banxico Decision
Earlier in the day, ADP data showed that private-sector hiring in the U.S. increased by 183,000 jobs in January, surpassing analysts’ expectations of 150,000.
This stronger-than-expected report, which precedes Friday’s nonfarm payroll data, reinforces bets that the Federal Reserve (Fed) may keep interest rates steady for longer. Meanwhile, investors are awaiting Banxico’s first monetary policy announcement of the year, scheduled for Thursday.
Many analysts predict a rate cut of up to 50 basis points, which, if confirmed, could further reduce the appeal of Mexican debt.
Traders will closely monitor Banxico’s decision, as the magnitude of the rate cut and the accompanying statement will be key market drivers. Additionally, local inflation data is set to be released on Friday.
Weak Local Indicators
On the domestic front, Mexico’s business investment rose 0.1% in November compared to October, exceeding expectations of a slight contraction. However, on an annual basis, investment declined 0.7%.
Today, the exchange rate faced pressure from multiple fronts, including a stronger U.S. labor report, ongoing tariff tensions driven by Trump, and weak domestic economic data.
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