Mexican Peso Hits Six-Month High but Ends Session Flat
Quick overview
- The Mexican peso reached its strongest level in six months, closing at 19.6502 pesos per dollar amid improved trade relations between the U.S. and China.
- Investor sentiment was boosted by President Trump's optimistic remarks about negotiations with Beijing, despite no official decisions on tariffs being made.
- The U.S. Dollar Index rose by 0.94%, while the peso briefly dipped below the key 19.50 support level due to the positive trade outlook.
- In Mexico, retail sales increased for the fourth consecutive month, although the growth was less than anticipated, with upcoming inflation data expected.
Live USD/MXN Chart
The prospect of improved trade relations between China and the United States helped push the exchange rate down to 19.46 pesos per dollar—its best level since October.
The Mexican peso ended Wednesday’s session unchanged against the U.S. dollar. After briefly touching its strongest level in six months, boosted by improved investor sentiment following remarks by U.S. President Donald Trump, the currency pair closed flat.
The exchange rate finished the day at 19.6502 pesos per dollar. Compared to the official rate of 19.6530 from the previous day, according to data from the Bank of Mexico (Banxico), this represented a marginal gain of just 0.01%—less than one cent.
The dollar traded within a range, reaching a high of 19.6768 and a low of 19.4695 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.94% to 99.91 points by the close.
Focus on U.S.–China Relations
Midweek optimism in the markets was driven by expectations that the U.S. and Chinese governments may soon reach an agreement to ease trade tensions. On Tuesday, Trump told reporters he would be “very nice” in negotiations with Beijing.
Media reports also buoyed investor sentiment, suggesting the U.S. might consider rolling back tariffs on Chinese goods. However, the Trump administration later clarified that no decision had been made yet.
The exchange rate briefly broke below the key 19.50 support level, driven by this improved trade outlook—despite White House Press Secretary Karoline Leavitt stating that the decision was still under consideration.
Fed Comments and Mexican Economic Data
Another positive factor came after Trump criticized Federal Reserve Chair Jerome Powell for not cutting interest rates. Despite the criticism, Trump stated he had no intention of firing Powell, which helped reassure markets.
On the domestic front, data showed that retail sales in Mexico rose for a fourth consecutive month in February, though the increase was smaller than expected. Later this week, markets are awaiting inflation figures and the Global Indicator of Economic Activity (IGAE).
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