Mexican peso starts the week strong as the US dollar weakens

The Mexican peso appreciated against the US dollar connected Monday greeting owed to accrued appetite for riskier assets aft United States President Donald Trump exempted smartphones, computers and immoderate different tech products from his alleged “reciprocal tariffs,” including a 125% work connected imports from China.

After closing astatine 20.29 to the greenback connected Friday, the peso strengthened to 20.02 to the dollar connected Monday morning, according to Yahoo! Finance, representing an appreciation of conscionable implicit 1.3%.

At 1 p.m. Mexico City time, the peso was trading astatine a somewhat weaker 20.11 to the dollar.

The strengthening of the peso to adjacent to 20 to the dollar connected Monday came 5 days aft the currency weakened to supra 21 to the greenback amid an escalating commercialized warfare betwixt the United States and China. As the strengthening came astatine the opening of Semana Santa, oregon Holy Week, the El Financiero paper described it arsenic a “santa apreciación” oregon “holy appreciation” successful a headline.

The Trump administration’s announcement connected Friday that it was dropping “reciprocal” tariffs connected tech products including smartphones, computers, semiconductors and level sheet TV displays — astatine slightest temporarily — accrued investors’ appetite for riskier assets specified arsenic the Mexican peso.

Analysts from Mexican slope Banco Base said that the appreciation of the peso was owed to “a alteration successful hazard aversion” aft Trump dropped 125% tariffs connected compartment phones, computers, semiconductors and different physics devices imported from China.

A 20% “fentanyl tariff” connected goods sent to the U.S. from China remains successful effect.

The DXY index, which measures the US dollar against a handbasket of six large currencies, declined connected Monday morning, indicating a wide weakening of the greenback.

The peso has mostly traded astatine supra 20 to the US dollar this year, though it strengthened to beneath the 20-to-the-greenback level for a little play successful March. Trump’s on-again, off-again tariffs person caused volatility successful the USD:MXN speech rate.

In April past year, the peso reached an astir nine-year precocious of 16.30 to the dollar, but depreciated importantly aboriginal successful 2024 owed to a scope of factors including the ruling Morena party’s broad triumph successful Mexico’s 2024 elections, Congress’ support of a arguable judicial betterment and Donald Trump’s triumph successful the U.S. statesmanlike predetermination past November.

With reports from El Financiero and El Economista