Mexican Peso Weakens Against Dollar as Market Eyes Trump
The Mexican peso depreciated moderately against the dollar in midweek trading, as investors remained cautious ahead of news regarding the U.S. tariff strategy and the upcoming local monetary policy announcement.
The exchange rate closed at 20.1370 pesos per dollar, down from 20.0700 pesos the previous day, according to official data from the Bank of Mexico (Banxico). This represents a 0.33% loss, or 6.70 centavos.
Throughout the session, the dollar traded within a range of 20.1686 at its highest and 20.0454 at its lowest. Meanwhile, the U.S. Dollar Index (DXY)—which measures the dollar against a basket of six major currencies—rose 0.34% to 104.56 points.
Market Focus on Trump’s Tariff Plans
Investors are awaiting further details on U.S. President Donald Trump’s tariff plans. According to the White House, Trump is scheduled to hold a press conference Wednesday afternoon to announce new tariffs on the automotive industry.
Earlier this week, Trump stated that not all threatened tariffs will take effect on April 2 and that some countries could receive exemptions. On Tuesday, he also acknowledged efforts by Canada and Mexico to strengthen border security.
Exchange rate uncertainty may persist into next week, when more clarity emerges regarding which tariffs will actually be imposed on Mexico by the U.S.
Banxico’s Policy Narrative
On the domestic front, traders are preparing for Banxico’s monetary policy decision. Markets widely expect another 50-basis-point interest rate cut, following inflation data that remains within the central bank’s target range.
A 50-basis-point rate cut is anticipated, along with signals on the outlook for the rest of the year amid lingering upside risks. This time, caution is likely to be the foundation of Banxico’s narrative.
Euro Exchange Rate
The euro weakened amid uncertainty over potential tariffs impacting the European bloc. The exchange rate closed at 21.6899 pesos per euro, down from 21.7194 pesos the previous day, marking a 0.14% appreciation for the peso (a gain of 2.95 centavos).
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