The Mexican peso depreciates against dollar, closing at 18.6444 per USD as traders weigh Trump’s new Canada tariffs and USMCA fallout.
The Mexican peso closed Friday at 18.6444 per dollar, extending its slide amid fresh concerns over U.S. President Donald Trump’s new tariffs. This loss of 2.75 cents, or 0.15 percent, against Thursday’s 18.6169 finish reflects growing unease about potential knock-on effects for Mexico’s economy and trade relationship with its largest partner.
On Friday the greenback traded between a daily low of 18.6028 and a high of 18.7483 pesos. Meanwhile, the Intercontinental Exchange’s Dollar Index (DXY), which tracks the U.S. currency against a basket of six major peers, jumped 0.29 percent to 97.87, marking its highest level in several sessions.
Traders cited President Trump’s letter to Canadian Prime Minister Mark Carney, in which he set a 35 percent tariff on Canadian exports to the United States effective August 1. U.S. imports from Canada already face a 25 percent duty. Though the move targets Canada, markets fear it could foreshadow similar penalties for Mexico if USMCA negotiations falter.
“After Trump announced tariffs on Canada, the peso reversed its weekly gains,” Monex Grupo Financiero noted. “That move raised doubts about USMCA talks and the risk of new levies on Mexican goods.” The firm warned that investors are recalibrating positions as they assess how trade tensions may escalate in North America.
The peso had enjoyed modest gains during the week, driven partly by local inflation data that supported bets on a slower pace of rate cuts by the Bank of Mexico (Banxico). On July 9, inflation figures suggested Banxico might pause its easing cycle, sending the peso briefly to its strongest level since August 2024. It reached 18.5502 pesos midweek before retreating.
Rebounding from that peak, the currency ended the week with a net loss of 1.47 cents versus last Friday’s 18.6297, a marginal 0.08 percent decline. Observers say the pullback underscores the peso’s sensitivity to external policy shifts, especially when U.S. trade measures change the calculus for exporters and foreign investors.
Looking ahead, market participants will watch Banxico’s next policy meeting for signals on whether it will maintain its benchmark rate or opt for further easing to support growth. At the same time, any updates on USMCA negotiations or further tariff announcements could trigger renewed volatility.
For now, analysts expect the peso to trade in a range between 18.50 and 18.80 against the dollar, barring major geopolitical developments. With U.S. inflation data and corporate earnings reports due next week, the peso’s trajectory will hinge on both domestic monetary decisions and shifts in the global risk environment.
