Mexican peso (MXN) Market Update
The Mexican peso (MXN) has experienced notable volatility recently as traders assess the impact of US tariffs on key trading relationships. Following comments from President Claudia Sheinbaum indicating retaliatory measures against the United States in response to tariffs imposed by the previous Trump administration, the peso initially weakened against the US dollar. However, optimism surrounding potential negotiations resurfaced when US Commerce Secretary Howard Lutnick hinted at the possibility of easing the tariffs, prompting a subsequent rebound in the peso's value.
Recent data shows that the MXN to USD exchange rate reached 7-day highs near 0.051197, representing a 3.1% increase above its 3-month average of 0.04966. The peso has traded within a stable range of 6.9%, between 0.047972 and 0.051272, indicating some resilience in the face of external pressures.
With a significant development in the trade context, President Trump agreed to delay the implementation of the 25% tariffs on Mexico for one month after discussions with Sheinbaum. In exchange, Mexico plans to deploy 10,000 troops at the border to address issues related to fentanyl trafficking and migration. This news triggered a rally in the peso, making it a leader among risk currencies.
In terms of performance against other currencies, the MXN to EUR is currently at 30-day highs near 0.045607, aligning closely with its 3-month average. The exchange has had a volatile trading range of 9.0% from 0.043332 to 0.047252. Similarly, against the GBP, the peso is also at 30-day highs near 0.038677, merely 0.7% above its 3-month average of 0.038388, operating within a stable range of 4.6% from 0.037579 to 0.039298. Against the JPY, the MXN stands at 7.4676, up 2.0% compared to its 3-month average of 7.3245, with a range of 7.2% from 7.0176 to 7.5209.
Economists and analysts suggest that the market is cautiously optimistic, expecting progress in US-Mexico negotiations that may alleviate tariff fears and stabilize MXN values in the coming weeks.
