The Mexican peso (MXN) has experienced significant volatility in recent weeks as traders assessed the implications of ongoing trade tensions between the US and Mexico. Following remarks from Mexico's President Claudia Sheinbaum announcing potential retaliatory measures against newly imposed tariffs by the Trump administration, the peso initially weakened against the US dollar. However, a subsequent statement from US Commerce Secretary Howard Lutnick, indicating a possible easing of tariffs, contributed to a rebound in the currency.
Analysts noted that hopes for negotiations between the two countries are supporting expectations that the proposed 25% tariffs may not be long-lasting. In a notable development, President Trump agreed to delay the tariffs for one month after discussions with President Sheinbaum, with Mexico promising to deploy 10,000 troops to its border to address concerns over migration and drug trafficking. This news spurred a rally in risk currencies and provided a temporary boost to the peso.
Currently, the MXN to USD exchange rate stands at 0.053647, which is 3.3% higher than its 3-month average of 0.051927, displaying a considerable trading range of 9.1% from 0.049245 to 0.053748. In the Euro market, the MXN is trading at 0.045895, slightly above its 3-month average of 0.045383, within a stable range of 6.5%. against the British pound, the peso has reached 90-day highs near 0.039757, up 2.9% from its average and demonstrating a strong trading range. Meanwhile, the MXN to JPY has also hit 90-day highs at 7.9072, reflecting a noteworthy increase of 5.4% over its average, with a volatile trading range of 11.9%.
Market observers suggest that stabilization may hinge on developments in US-Mexico trade relations, making it essential for businesses and individuals engaged in international transactions to stay informed of ongoing negotiations and currency trends.
