Puerto Vallarta, Mexico – The Mexican peso extended its upward momentum on Friday, benefiting from a weakening US dollar and positive market sentiment tied to a more conciliatory tone from US President Donald Trump regarding trade policies. The exchange rate closed at 20.2856 pesos per dollar, reflecting a daily gain of 3.72 cents or 0.18%, according to the Bank of Mexico (Banxico).
This marks a positive end to the week for the peso, with the currency trading within a range of 20.1353 to 20.3907 units per dollar throughout the day. The US Dollar Index (DXY), which measures the greenback’s performance against six major currencies, dropped by 0.58% to 107.51 units, further contributing to the peso’s recovery.
Weekly Performance
Over the course of the week, the peso demonstrated a robust advance, gaining 48.97 cents or 2.36% compared to its closing value of 20.7753 pesos per dollar the previous Friday. Meanwhile, the dollar experienced a 1.69% loss against its major global peers, marking its worst weekly decline in two months.
This recovery was part of a broader trend in Latin American currencies, many of which gained ground against the dollar as global investors reacted to the shift in trade rhetoric from the United States.
Trump’s Moderated Trade Stance Boosts Optimism
President Trump’s recent remarks played a significant role in easing market tensions. In an interview with Fox News, he expressed a preference to avoid imposing additional tariffs on China, a statement widely interpreted as a softening of his administration’s trade policy. Furthermore, his comments at the World Economic Forum in Davos, Switzerland, included calls for lower interest rates and reduced oil prices, which were viewed positively by investors.
Despite the optimistic tone, market analysts remain cautious about the potential for volatility stemming from unpredictable policy shifts. “We know how unpredictable Trump can be, and at any moment his statements can go against the trade relationship with Mexico,” warned CIBanco.
Economic Data Supports Peso Gains
Positive economic indicators in Mexico also contributed to the peso’s strength. The National Institute of Statistics and Geography (Inegi) reported that the Global Indicator of Economic Activity (IGAE) expanded by 0.4% in November compared to the previous month. On an annual basis, the indicator showed growth of 0.5%.
The better-than-expected economic data, coupled with a more conciliatory trade outlook, further supported the peso. “Today, the Mexican peso strengthened following higher-than-expected local economic activity figures, as well as growing expectations of a more conciliatory trade approach with the United States,” analysts at Monex Grupo Financiero noted.
Outlook for the Week Ahead
Market attention will now shift to key economic events in the coming week, including significant indicators from both the United States and Mexico. Of particular importance will be the Federal Reserve’s policy decision, with markets widely anticipating that interest rates will remain unchanged. Any unexpected developments could influence the peso’s performance and broader market trends.
As the Mexican peso continues its recovery, analysts advise monitoring trade developments and US monetary policy closely. While recent signals have been encouraging, the unpredictability of global economic factors suggests that caution is warranted.
Puerto Vallarta, Mexico - The Mexican peso extended its upward momentum on Friday, benefiting from a weakening US dollar and positive market sentiment tied to a more conciliatory tone from US President Donald Trump regarding trade policies. The exchange rate closed at 20.2856 pesos per dollar, reflecting a daily gain of 3.72 cents or 0.18%, according to the Bank of Mexico (Banxico).
