Mexican peso appreciation drove the peso to close at 19.1997 per dollar, up 0.18% as the U.S. dollar weakened amid trade tensions and higher tariffs.
The Mexican peso appreciated against the U.S. dollar on Wednesday, closing at 19.1997 per dollar, a gain of 0.18 percent from Tuesday’s 19.2348 close, according to official data from the Bank of Mexico. The U.S. dollar’s intraday trading range spanned a high of 19.4000 and a low of 19.1112 per peso. The peso has reached its eight-month high on a weakening dollar.
The ICE Dollar Index (DXY), a broad measure of the U.S. dollar’s value against six benchmark currencies, fell 0.43 percent to 98.82 points, reflecting broad dollar weakness amid growing trade tensions.
Analysts attributed the peso’s strength in part to concerns over the U.S. dollar’s role in ongoing trade disputes. President Donald Trump’s administration on Wednesday doubled tariffs on steel and aluminum imports to 50 percent, a move aimed at bolstering domestic metal industries but criticized by trading partners Mexico and Canada. Mexico’s government has labeled the tariffs “unjust” and “without legal grounds,” warning of potential retaliatory measures if exemptions are not negotiated.
“The exchange rate had a positive session for the peso, albeit with lower volatility. It’s not ruled out that the price could seek the 19 level given further dollar weakness, although it is in an accumulation zone,” said Juan Carlos Cruz, a financial consultant.
Banco Base noted that, “From a technical perspective, the exchange rate has been trading around the 19.20 pesos per dollar level. However, it has not managed to break above this level on a sustained basis, indicating that it is considered attractive for hedge buying.”
Market participants will watch for further developments in U.S.-China trade talks and any decisions from the Federal Reserve that might affect dollar liquidity.
