The Mexican peso extended its decline against the U.S. dollar on Friday, as investors continued to assess the potential economic impact of Donald Trum
The Mexican peso extended its decline against the U.S. dollar on Friday, as investors continued to assess the potential economic impact of Donald Trump’s electoral victory.
The local currency fell sharply, reflecting market anxiety over the newly elected president’s policies.
The exchange rate closed the day at 20.1948 pesos per dollar, compared to Thursday’s official closing of 19.8670 units, according to the Bank of Mexico (Banxico). This move represented a loss of 32.78 cents or 1.65%.
Throughout the trading day, the dollar fluctuated between a high of 20.2766 pesos and a low of 19.7740 pesos. The U.S. Dollar Index (DXY), which measures the greenback against six major currencies, rose 0.46% to 105.00 points.
Despite the peso’s drop, the currency managed a slight improvement for the week. Compared to last Friday’s close of 20.2768 units, the peso gained 8.20 cents, or 0.44%.
USD/MXN
Reports indicate that president-elect Donald Trump has asked Robert Lighthizer, a staunch advocate of tariffs, to reprise his role as U.S. Trade Representative. Lighthizer was previously instrumental in renegotiating NAFTA with Mexico.
Earlier in the session, the peso was trading near the 20 per dollar mark, having rebounded the previous day due to higher-than-expected inflation data in Mexico and a 25-basis point rate cut by the Federal Reserve.
Just after the U.S. election, the peso hit a peak of 20.8038 units per dollar, its weakest level in over two years, as Trump’s campaign rhetoric had frequently targeted Mexico. There is speculation that tariffs on China could increase, and a universal tariff on imports might also be on the table, which could continue to pressure global currencies.
Nevertheless, the peso appeared set to end the week with a moderate appreciation. Market attention is shifting to Banxico’s interest rate decision on Thursday, following a spike in inflation and a drop in the core rate.
Next week, investors will also be watching the presentation of Mexico’s budget package for the coming year. President Claudia Sheinbaum Pardo’s administration faces the challenge of reducing the fiscal deficit.
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