Mexican Peso Rises Against Dollar on Possible Trump Flexibility
The Mexican peso strengthened on Monday, supported by the possibility that Donald Trump’s administration may adopt a more measured approach to tariffs in its next round.
The local currency appreciated against the dollar, closing at 20.0587 pesos per dollar, up 18.18 cents (0.90%) from the previous session’s official close of 20.2405 pesos, according to Banco de México (Banxico).
The dollar fluctuated within a range, peaking at 20.2395 and bottoming at 20.1016 pesos. The Dollar Index (DXY), which tracks the greenback against a basket of six currencies, rose 0.17% to 104.27 points.
Focus on Trump
Over the weekend, reports indicated that the Trump administration may exclude several sectoral tariffs set to take effect on April 2. Trump confirmed plans to announce tariffs on automobiles, aluminum, and pharmaceuticals soon.
The Mexican peso had experienced three consecutive days of losses from Wednesday to Friday, driven by concerns from central banks over the trade environment, tariff impacts on growth, and inflation. The speculation that the next round of tariffs may be more moderate, with exemptions for certain countries and delays or reductions in sector-specific tariffs, helped boost the peso.
Volatility Expected
Some analysts cautioned that, despite these developments, Trump’s unpredictability means currency volatility can’t be ruled out. The risk of further deterioration in U.S.-Mexico trade relations remains, and the peso may experience significant fluctuations depending on Trump’s actions and statements.
In other economic data, Mexico’s inflation for the first half of March was reported at 3.67% annually, slightly below expectations.
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