Mexican Peso Weakens Against Dollar Amid Tariff Concerns

The Mexican peso depreciated against the dollar on Friday, extending its losses in a week dominated by concerns over U.S. President Donald Trump’s tariffs and their potential economic impact.

The exchange rate closed at 20.2405 pesos per dollar, down from an official closing of 20.1481 pesos yesterday, according to data from the Bank of Mexico (Banxico). This represented a loss of 9.24 centavos, or 0.46%.

USD/MXN

The dollar traded within a range of 20.2755 at its peak and 20.1355 at its lowest. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.34% to 104.17 points.

Midweek, cautious remarks from the Federal Reserve (Fed) about the economy dampened investor sentiment. While the Fed acknowledged signs of economic resilience, it also warned that tariffs could pressure growth and fuel inflation.

This uncertainty has been particularly challenging for emerging market currencies like the Mexican peso, which are more sensitive to shifts in market sentiment.

Mexican Peso Outlook

Traders are now looking ahead to key economic data next week, including Banxico’s monetary policy announcement. Analysts expect the central bank to cut its benchmark interest rate by 50 basis points.

For the week, the peso recorded a 1.59% decline, losing 31.67 centavos from its previous official close of 19.9238 last Friday. The sharp drop reflected heightened market uncertainty amid trade tensions.