The Mexican peso (MXN) has experienced considerable volatility in recent weeks, primarily influenced by developments in US-Mexico trade relations. Analysts noted that the peso fell in value against the US dollar following the announcement of retaliatory measures by President Claudia Sheinbaum in response to newly implemented US tariffs. However, optimism arose when US Commerce Secretary Howard Lutnick indicated that these tariffs might be eased, leading to a rebound in the peso’s value.
Recent negotiations, which saw President Trump delay the imposition of 25% tariffs for a month, have further fueled market optimism. In this arrangement, Mexico has committed to deploying 10,000 troops to its border as part of efforts to reduce the flow of fentanyl and migration into the US. This positive development sparked a rally in risk currencies, with the peso leading the charge.
Looking at recent price data, the exchange rate for MXN to USD is currently at 0.053327, marking a 2.2% increase above its three-month average of 0.052181. This pair has traded within a stable range of 6.0%, from 0.050682 to 0.053748. Similarly, the MXN to EUR is at 0.045859, which is 0.7% above its three-month average of 0.045523, with a narrow trading range of 4.9%. For MXN to GBP, the current value of 0.039758 sits 2.6% above its three-month average of 0.038769, within a stable range of 5.1%. Notably, the MXN to JPY is trading at 7.9356, significantly 5.0% higher than its three-month average of 7.5583 and exhibiting more volatility with an 11.2% trading range.
Overall, the Mexican peso's recent performance reflects the market's reaction to unfolding trade dynamics and the prospects for negotiation between Mexico and the US. Traders remain watchful as future developments could significantly sway exchange rates.
