Mexican Peso Falls 1.6% on Trump Concerns
The Mexican peso sharply depreciated on Thursday, losing ground due to global dollar strength. It ranked as the most depreciated currency among a basket of major currencies, as markets braced for the return of Donald Trump to the U.S. presidency.
The exchange rate closed at 20.8187 pesos per dollar, down from 20.4915 pesos the previous day, according to official data from Banco de México (Banxico). This represented a drop of 32.72 cents, or 1.60%. The USD/MXN traded in a range between 20.4570 and 20.8445 pesos, while the U.S. Dollar Index (DXY) fell 0.15% to 108.95 points.
Uncertainty Surrounding Trump
Republican Donald Trump is set to begin his second term as U.S. president on Monday. During his campaign, he threatened to impose tariffs on major trade partners, including a 25% tariff on Mexico, creating uncertainty about future U.S.-Latin America trade relations.
Last year, Mexico became the United States’ top trading partner, with 83% of Mexico’s exports going to the U.S. from January to November. This relationship is a key driver of the Mexican economy.
Interest Rates and Inflation Concerns
Worries over U.S. interest rates and inflation have also weighed on the peso. Trump’s policies could hinder Federal Reserve easing, adding further pressure.
While U.S. inflation data earlier this week briefly boosted the peso, analysts noted that these gains were quickly reversed. Concerns also extend to Japan’s central bank, which may raise rates in an upcoming policy meeting, adding to global market uncertainty.
ABOUT THE AUTHOR
See More
Sidebar rates
Add 3440
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals