Mexican Peso Recovers 2.53% in a Single Day
The Mexican peso posted a strong recovery against the U.S. dollar on Wednesday, following an announcement by U.S. President Donald Trump.
Trump will suspend so-called reciprocal tariffs on imports from dozens of countries for 90 days — a move that was welcomed by market participants.
The exchange rate closed at 20.2818 pesos per dollar, compared to Tuesday’s official closing of 20.8083 pesos, according to data from the Bank of Mexico (Banxico). This represents a gain of 52.65 centavos, or 2.53%, for the Mexican currency.
During the session, the dollar traded in a wide range, reaching a high of 21.0809 — a level not seen since late February — and a low of 20.2072. The U.S. Dollar Index (DXY), which measures the greenback against six major currencies, rose 0.09% to 103.06 points at the close.
It was one of the most volatile trading days of the year, with the second-largest intraday range (82 centavos) recorded. The market continues to show low liquidity and persistent price gaps, contributing to erratic movement.
Volatile Market Environment
Earlier in the day, the peso had weakened beyond 21 per dollar for the first time in over a month, as trade tensions between the U.S. and China intensified and a domestic inflation report fueled expectations of further rate cuts by Mexico’s central bank.
On Tuesday, the U.S. announced it would raise tariffs on Chinese goods to 104% after China failed to lift a retaliatory 34% duty. Beijing responded swiftly with tariffs of 84%, sparking widespread market concerns.
However, Trump later announced a 90-day pause on tariffs for more than 75 countries and confirmed that the new 125% tariff hike would apply exclusively to Chinese imports — signaling that China remains his administration’s primary trade target for now.
The peso’s recovery came shortly after the announcement, though the market is expected to remain highly volatile and reactive to ongoing geopolitical developments. Analysts suggest watching the 20.20–20.50 peso-per-dollar range in the short term.
Inflation and Interest Rate Outlook
On the macroeconomic front, data released Wednesday showed that Mexico’s March inflation came in as expected at 0.31% month-over-month. On an annual basis, inflation accelerated slightly from 3.77% to 3.80%, mainly due to seasonal effects from Easter and rising prices in agricultural products.
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