Puerto Vallarta, Mexico – The U.S. dollar began trading this Monday with a notable depreciation against the Mexican peso following a significant rise over the weekend. The spike was driven by tariffs imposed by former U.S. President Donald Trump on products from Mexico and other countries, sparking volatility in currency markets.
As of 6:50 a.m. local time in Mexico City, the greenback stood at $21.06 pesos, representing a 0.52% decline from the previous session’s close. Despite this morning’s dip, the dollar remains stronger than the previous week due to the tariff-driven surge.
Currency analysts predict a volatile week in the foreign exchange market, with traders bracing for potential new policy measures from the U.S. administration. There is also speculation of a possible reversal of Trump’s tariffs, which have sparked criticism from both domestic and international business groups.
Impact on Banxico Rate Decision
The renewed volatility has heightened expectations that the Bank of Mexico (Banxico) will announce a larger interest rate cut during its upcoming policy meeting this Thursday. The central bank’s current benchmark rate stands at 10%, but speculation is mounting that Banxico may reduce rates by at least 25 basis points (bps) to 9.75%. Some analysts even suggest a more aggressive 50 bps cut remains on the table.
The potential rate adjustment comes as Banxico balances its efforts to control inflation while responding to economic challenges stemming from external factors, including the recent U.S. tariffs. A softer interest rate could provide much-needed relief for Mexican businesses navigating increased trade uncertainties.
Trade Tensions and Market Outlook
The tariffs imposed by Trump have rekindled trade tensions, which were a hallmark of his previous presidency. Industries on both sides of the border are already feeling the pressure, with Mexican exporters expressing concern about reduced competitiveness in the U.S. market.
“We are seeing immediate impacts on supply chains and pricing strategies,” said a trade analyst from Mexico’s National Business Council (CONECAM). “The uncertainty over further tariffs or reversals only adds to the strain.”
Financial markets will be closely monitoring statements from both the U.S. and Mexican governments in the coming days. Banxico’s rate decision and potential U.S. policy developments are expected to be key factors in shaping the peso’s trajectory throughout the week.
Investors are advised to remain cautious as the currency market responds to evolving trade dynamics and interest rate expectations.
Puerto Vallarta, Mexico - The U.S. dollar began trading this Monday with a notable depreciation against the Mexican peso following a significant rise over the weekend. The spike was driven by tariffs imposed by former U.S. President Donald Trump on products from Mexico and other countries, sparking volatility in currency markets.
