The Mexican peso (MXN) has experienced notable volatility recently as traders respond to changing dynamics in US-Mexico trade relations. Following the announcement of tariffs by the Trump administration, which aimed at some of Mexico's key trading partners, the peso initially declined. President Claudia Sheinbaum's statement regarding retaliatory measures against the US prompted this downturn. However, optimism returned when US Commerce Secretary Howard Lutnick indicated a potential easing of tariffs, allowing the peso to rebound.
The recent decision to delay the implementation of a 25% tariff against Mexico for one month, following negotiations between President Trump and President Sheinbaum, has further influenced market sentiment. In exchange for this delay, Mexico has committed to deploying 10,000 troops at the border to address the migration crisis and the trafficking of fentanyl. This development led to a rally in risk currencies, with the peso showing resilience.
As of the latest data, the MXN to USD exchange rate has reached 30-day lows around 0.052972, only 0.8% above its three-month average of 0.052529. The trading range for this pair has been relatively stable, fluctuating within 6.2% between 0.050774 and 0.053941. Meanwhile, the MXN to EUR is positioned at 0.046398, which is 1.5% above its three-month average of 0.045696, with a stable trading range from 0.044721 to 0.046447.
In the case of the MXN to GBP, the exchange rate stands at 0.040123, reflecting a 2.9% increase over its three-month average of 0.039007, while maintaining a relatively stable range between 0.038035 and 0.040155. On a different note, the MXN to JPY has reached new 90-day highs near 7.9931, soaring 4.5% above its three-month average of 7.6492, amidst a more volatile trading environment with a range of 10.4% from 7.2409 to 7.9931.
Overall, analysts suggest that heightened hopes of negotiations between Mexico and the US may support the peso's performance as the situation unfolds. Monitoring future developments will be crucial for individuals and businesses involved in international transactions.
