Peso posts best rate against US dollar so far in 2025

The Mexican peso reached its strongest presumption against the US dollar truthful acold this twelvemonth connected Thursday morning, appreciating to conscionable supra 20 to the greenback.

The peso strengthened to 20.05 to the dollar, earlier weakening somewhat to commercialized astatine 20.08 to the greenback astatine 1 p.m. Mexico City time, according to Yahoo Finance.

The peso strengthened Thursday contempt 25% tariffs placed by the U.S. President Donald Trump connected Mexican aluminum and alloy the time before. (Donald Trump/Facebook)

The 20.05 speech complaint represented a 0.6% appreciation for the peso compared to its closing presumption of 20.18 connected Wednesday, according to the Bank of Mexico.

Thursday morning’s appreciation occurred contempt the United States’ implementation of 25% tariffs connected imports of alloy and aluminum from Mexico and each different countries on Wednesday.

On March 4, the peso depreciated to 21 to the dollar aft 25% U.S. tariffs connected each Mexican exports took effect. Most of those tariffs were lifted 2 days later.

On Thursday, the peso appreciated aft the United States’ Producer Price Index showed that wholesale terms increases slowed importantly successful the U.S. successful February. The information “strengthens bets” that the United States Federal Reserve volition chopped involvement rates sooner than expected, the El Economista paper reported.

However, it inactive appears improbable that the Fed volition trim the national funds complaint aft its monetary argumentation gathering adjacent week, oregon adjacent successful May. Reuters reported Thursday that traders are betting connected the Fed restarting involvement complaint cuts successful June.

The Mexican peso benefits from the quality betwixt involvement rates successful Mexico and involvement rates successful the United States, but the spread has closed owed to the Bank of Mexico’s caller monetary argumentation easing, including a 50-basis-point chopped to its cardinal complaint past month.

Mexico’s peso has benefitted successful the past twelvemonth from the ample spread betwixt the involvement rates acceptable by the United States Federal Reserve, seen here, and the Bank of Mexico’s rates. However, Mexico’s cardinal slope has been closing that spread successful its past respective meetings. (Dan Smith/Wikimedia Commons)

While the peso reached its strongest presumption this twelvemonth connected Thursday, it is overmuch weaker than it was a twelvemonth ago.

The astir nine-year precocious of 16.30 to the dollar that the peso reached past April now seems similar a distant memory, fixed the ample turbulence the Mexican currency experienced aft Mexico’s 2024 elections, Congress’ support of a arguable judicial reform, Donald Trump’s triumph successful the U.S. statesmanlike predetermination and his consequent — and galore — tariff threats directed toward the United States’ confederate neighbor.

The peso remains susceptible to volatility arsenic the United States — easy Mexico’s largest commercialized spouse — adopts a protectionist “America first” attack to its commercialized relationships with its neighbors and countries astir the world.

With reports from El Economista