The Mexican peso has reached its strongest position against the US dollar so far this year Thursday morning, just enjoying more than 20 in the greenback.
The Peso has strengthened at 20.05 to the dollar, before weakening slightly to negotiate itself at 20.08 in the greenback at 1 p.m. Mexico City, According to Yahoo Finance.
The exchange rate of 20.05 represented an assessment of 0.6% for the peso compared to its closing position of 20.18 Wednesday, According to the Bank of Mexico.
Thursday morning’s appreciation occurred despite The implementation of the United States of 25% of prices on steel and aluminum imports from Mexico And all the other countries on Wednesday.
On March 4, the Peso depreciated at 21 at the dollar after 25% of American prices on all Mexican exports have entered into force. Most of these prices were Raised two days later.
Thursday, the peso appreciated after The price index of producers in the United States has shown that wholesale price increases have slowed considerably in the United States in February. The data “strengthens bets” that the United States Federal Reserve will reduce interest rates earlier than expected, reported the newspaper El Economista.
However, it still seems unlikely that the Fed will reduce the rate of federal funds after its monetary policy meeting next week, or even in May. Reuters reported Thursday That traders bet on the Fed restarting interest rate reductions in June.
The Mexican peso benefits from the difference between interest rates in Mexico and interest rates in the United States, but the gap has concluded due to the recent relaxation of the monetary policy of the Mexico Bank, in particular, in particular A decrease of 50 basic points at its key pace last month.
While the Peso has reached its strongest position this year on Thursday, it is much lower than a year ago.
The highest years of 4:30 p.m. in the dollar that the Peso reached last April This now seems to be a distant memory, given the ample turbulence that the Mexican currency experienced after the Mexico elections in 2024, the approval of the Congress of a controversial judicial reform, the victory of Donald Trump in the American presidential election and its subsequent price threats – and many prices directed to the South of the United States.
Peso remains sensitive to volatility as the United States – Mexico’s largest trading partner – Adopts a “America First” protectionist approach to its trade relations with its neighbors and countries in the world.
With reports from The Economist
