Puerto Vallarta, Mexico – The Mexican peso is depreciating against the U.S. dollar on Thursday morning, leading losses among emerging market currencies as concerns mount over the United States’ trade policy and its potential economic consequences.
The spot exchange rate stands at 20.6190 pesos per dollar, representing a 0.54% decline compared to the official closing rate of 20.5093 pesos per dollar recorded by the Bank of Mexico (Banxico) on Wednesday. The local currency has weakened by 10.97 centavos as uncertainty looms over a possible announcement of reciprocal tariffs by the U.S. government.
The dollar is fluctuating within a trading range of 20.4948 to 20.6489 pesos per dollar. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, is down 0.31% to 107.68 units.
Market Reaction to U.S. Trade Policy Uncertainty
The depreciation of the peso follows reports that U.S. President Donald Trump is set to unveil a reciprocal tariff policy later today, though details remain scarce. The proposed measures could impose tariffs on imports from countries that already levy duties on American goods.
According to a report from financial services firm Monex, the peso is experiencing the largest decline among emerging market currencies today, as traders react to the potential impact of new U.S. trade restrictions.
“Today, the peso is ranked first in the basket of emerging currencies with the greatest decline against the dollar, affected by the possible announcement of reciprocal tariffs by the United States throughout the day,” Monex analysts stated.
Similarly, Banco Base noted that the U.S. dollar could strengthen further throughout the trading session following Trump’s post on his social media platform, Truth Social, where he hinted at an imminent tariff announcement.
Broader Implications for Mexico’s Economy
The weakening of the peso could have broader economic implications for Mexico, particularly for trade and inflation. A depreciating peso makes imports more expensive, which could contribute to rising prices for goods and services. Additionally, heightened trade tensions with the U.S. could impact Mexico’s export sector, as the U.S. remains Mexico’s largest trading partner.
Financial markets will be closely monitoring the upcoming U.S. trade policy announcement and its potential repercussions on global trade relations, currency markets, and economic stability in Mexico.
