Mexican Peso Rebounds Against the Dollar After Powell’s Remarks
The Mexican peso recovered from a weak start on Tuesday, initially pressured by new U.S. tariffs on aluminum and steel. As markets digested Federal Reserve Chair Jerome Powell’s remarks, the peso strengthened in late trading.
The exchange rate closed at 20.5392 pesos per dollar, improving from 20.5979 pesos the previous day, according to official data from Banco de México (Banxico). This represented a gain of 5.87 centavos (0.29%). The dollar traded within a range of 20.6594 (high) to 20.5026 (low), while the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, fell 0.39% to 107.91.
U.S. Tariffs and Interest Rate Expectations
On Monday, former President Donald Trump announced an additional 25% tariff on steel and aluminum imports, including those from Mexico and Canada. Although these tariffs are set to take effect on March 12, they initially fueled market uncertainty.
Later, Powell addressed the Senate Banking Committee, stating that while the U.S. economy remains strong, the Fed is in no rush to cut interest rates—but delaying for too long could also be risky. His mention of potential rate cuts provided some relief to markets ahead of January’s U.S. consumer price index (CPI) report, which could offer further guidance on monetary policy.
Despite trade tensions, the peso traded sideways, with technical support around 20.55 and resistance near 20.68. Meanwhile, Mexico’s industrial activity fell 1.4% in December from the previous month and declined 2.7% year-over-year, according to INEGI data.
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