The Mexican peso (MXN) has recently experienced notable volatility as traders assess the impact of US tariffs and potential retaliatory measures from Mexico. Following President Claudia Sheinbaum's announcement regarding potential responses to tariffs implemented by the Trump administration, the peso initially fell against the US dollar. However, it subsequently rebounded after remarks from US Commerce Secretary Howard Lutnick indicated a possibility of easing these tariffs, suggesting that the market is cautiously optimistic about upcoming negotiations between the two countries.
Recent developments indicate that an agreement has been reached to delay the 25% tariffs on Mexico for one month, contingent upon Mexico deploying 10,000 troops to address concerns over fentanyl and migration. This news spurred a rally in risk currencies, with the peso leading the charge as traders responded positively to these diplomatic efforts.
Currently, the MXN to USD exchange rate has reached 14-day lows near 0.052153, which is 2.3% above its three-month average of 0.050987. The MXN has fluctuated within a significant range of 10.4%, trading between 0.047972 and 0.052944. In contrast, the MXN to EUR rate is at 30-day lows near 0.045254, aligning closely with its three-month average, while trading in a more stable range of 6.7% from 0.043332 to 0.046250. For the MXN to GBP, the currency is currently at 7-day lows near 0.038759, sitting just 1.0% above its three-month average of 0.038385, with a relatively stable trading range of 4.3%. Meanwhile, the MXN to JPY rate is at 7.6199 and is 3.0% above its three-month average of 7.3965, demonstrating a considerable 9.0% range from 7.0176 to 7.6513.
As negotiations develop and market sentiment shifts, stakeholders should remain vigilant about the evolving dynamics, as these factors are likely to influence the peso's trajectory in the near term.
