Puerto Vallarta, Mexico – The Mexican peso fell on the first day of trading this week, snapping a four-session streak of gains as investors remained cautious about potential impacts from the economic and trade policies of U.S. President Donald Trump.
According to the Bank of Mexico (Banxico), the exchange rate ended the session at 20.3623 pesos per dollar, compared to 20.2672 on Friday. This shift represents a loss of 9.51 centavos—or 0.47%—for the local currency. During the session, the dollar fluctuated between a high of 20.3964 pesos and a low of 20.1814.
The broader U.S. dollar also strengthened slightly, with the Intercontinental Exchange’s Dollar Index (DXY)—which tracks the greenback against a basket of six major currencies—advancing 0.09% to finish at 103.93 points.
Concerns About Trump’s Trade Policies
In an interview on Sunday, President Trump declined to forecast whether the U.S. economy would slip into recession this year. “There is a transition period, because what we’re doing is so big. We’re bringing wealth back to America,” he said.
On Friday, Federal Reserve Chairman Jerome Powell reiterated that the U.S. central bank would be in no rush to lower interest rates. He emphasized the importance of waiting to see how the administration’s trade policies might influence economic growth before adjusting monetary policy.
Meanwhile, analysts remain alert to the possibility that trade tensions could flare up again. “Markets are focused on slower growth in the U.S. economy; tariff risks have not fully faded and we expect noise to continue as we head towards an early review of the USMCA,” Barclays said in a report.
Tariffs in Focus
Despite temporarily waiving tariffs under the United States-Mexico-Canada Agreement (USMCA) until April 2, President Trump is expected to move forward with tariffs on steel and aluminum within two days. U.S. Commerce Secretary Howard Lutnick remarked on Sunday that Trump “will not ease up” on imposing tariffs on Mexico, Canada, and China, demanding that they redouble efforts to stem fentanyl trafficking into their territories.
There have been differing responses from North American leaders: “President Claudia Sheinbaum said she was confident the U.S. would not impose tariffs in April,” noted Juan Carlos Cruz, a financial consultant. “However, Canadian Liberal Party leader Mark Carney said he would continue retaliating until the U.S. showed respect.”
Outlook
While the Mexican peso remains under pressure from external factors, investors are closely monitoring any new statements from U.S. policymakers. The next few weeks could prove critical in shaping the currency’s trajectory as tariff deadlines approach and speculation grows around potential changes to interest rates.
For now, traders will be watching for further developments in Washington regarding trade policies, which remain a driving force in the outlook for both the Mexican currency and the broader market.
