usd-mxnDomestically, the peso found support in a better-than-expected economic activity report for February, defying analysts’ expectations.Ignacio T
Quick overview
- The Mexican peso appreciated against the dollar, closing at 19.5223 pesos per dollar, supported by optimism over U.S.-China trade negotiations.
- Despite mixed media signals, the peso gained 0.30% from the previous day and 0.96% compared to last week’s reference rate.
- China’s announcement of tariff exemptions on U.S. imports has raised hopes for a resolution in the trade war, although conflicting reports from U.S. officials add uncertainty.
- Domestically, a better-than-expected economic activity report for February suggests Mexico’s economy may be stronger than previously thought.
Live USD/MXN Chart
USD/MXN
The Mexican peso appreciated against the dollar at the end of the week, supported by optimism over potential progress in U.S.-China trade negotiations, despite mixed signals from the media.
The exchange rate closed the session at 19.5223 pesos per dollar. Compared to Thursday’s official close of 19.5809, according to data from the Bank of Mexico (Banxico), the peso gained 5.86 centavos, or 0.30%.
The dollar traded in a range between a high of 19.6898 and a low of 19.5125 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, rose 0.31% to 99.60 points at the close.
USD/MXN
Despite a backdrop of uncertainty, the peso managed to end the week on a positive note. Compared to last Friday’s reference rate of 19.7124 pesos from LSEG (no Banxico reference due to a holiday), the currency posted a gain of 19.01 centavos, or 0.96%.
Shifting Headlines
China announced some tariff exemptions on U.S. imports, boosting hopes that the trade war between the world’s two largest economies might end in a market-friendly resolution.
In an interview with Time magazine published Friday, U.S. President Donald Trump stated that negotiations with China were ongoing and claimed President Xi Jinping had called him on Tuesday. However, Beijing has disputed Trump’s version of events.
Trump also said he would consider it a “total victory” if the U.S. imposed tariffs of up to 50% on foreign imports within a year. These shifting headlines and lack of concrete announcements have kept the exchange rate within a tight range.
Local Economic Boost
Domestically, the peso found support in a better-than-expected economic activity report for February, defying analysts’ expectations that Mexico might have entered a technical recession in the first quarter.
Mexico’s Global Indicator of Economic Activity (IGAE) rose 1% in February, according to the INEGI. Year-over-year, however, it was down 0.7%. These figures suggest the country’s economic performance could be less weak than previously anticipated.
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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