Puerto Vallarta, Mexico – The Mexican peso weakened on Friday morning, continuing its negative trajectory as the market braces for the possible implementation of U.S. tariffs on Mexico and Canada starting Saturday, February 1.
The peso’s spot exchange rate stood at 20.6326 pesos per dollar, according to data from the Bank of Mexico (Banxico). This represents a decline of 20.53 cents, or 1.01%, compared to Thursday’s closing level of 20.4273 pesos per dollar.
The currency has traded within a range, reaching a high of 20.7511 units and a low of 20.5828 units against the dollar. The U.S. Dollar Index (DXY), which tracks the greenback against a basket of six major currencies, rose 0.13%, standing at 108.29 points.
Tariff Threat Looms Over Peso
U.S. President Donald Trump reiterated his stance on imposing tariffs on Mexico and Canada, stating Thursday that he would decide whether the proposed 25% tariffs would extend to oil imports. As of Friday morning, no further clarification had been provided by the U.S. administration.
Trump’s remarks drove the exchange rate to a high of 20.7655 pesos per dollar following Thursday’s market close. Analysts project the Mexican currency to end the week with a 1.71% decline, or 34.7 cents lower than last Friday’s closing level of 20.2856 units.
Market Awaits Further Developments
Grupo Financiero Banorte released an analysis report on Friday morning, stating:
“We will be attentive throughout the day for any potential developments regarding the tariff situation, as some of Trump’s advisors have indicated possible avenues to prevent the tariffs from taking effect.”
The peso has faced significant market pressure this week. Monday saw its worst session in seven months after President Trump revived trade tensions by threatening tariffs on Colombia, although no formal action has been taken.
Mexican Government Responds
On Wednesday, Mexican President Claudia Sheinbaum downplayed the tariff threats, asserting that her administration had a comprehensive response plan in place.
“We are prepared to protect the country’s economic stability and trade relationships,” Sheinbaum said.
In parallel, a senior Trump administration nominee indicated on the same day that there might be diplomatic avenues to avoid the tariffs.
As markets remain on edge, analysts and government officials continue to monitor developments closely, hoping for a resolution that will ease trade tensions and stabilize the peso’s value.
