The Mexican peso fell against the United States dollar on Thursday after United States President Donald Trump confirmed that tariffs on imports from Mexico and Canada will take effect on March 2.The announcement reversed earlier optimism that the tariffs might be delayed, shaking investor confidence and pushing the peso lower.
The peso traded at 20.4644 pesos per dollar by late afternoon.This marked a 0.18% depreciation from Wednesdays official close of 20.4268 pesos per dollar, according to Banco de Mxico.
The exchange rate fluctuated between a high of 20.5487 and a low of 20.3584 during the day.Earlier, the peso had shown strength for a second consecutive session, buoyed by comments from White House economic advisor Kevin Hassett, who suggested that tariff decisions could hinge on an upcoming study expected in April.However, Trumps morning statement erased these gains, reinforcing fears of immediate trade disruptions.
Mexicos economic data added to the pesos challenges.
The country reported a trade deficit of $4.55 billion in January, compared to a surplus in December, alongside a rise in unemployment to 2.7%.Mexican Peso Slides as Trump Confirms Tariffs on Mexico and Canada.
(Photo Internet reproduction)Meanwhile, mixed United States economic data showed steady GDP growth at 2.3% quarter-on-quarter but weaker-than-expected jobless claims, further complicating global market sentiment.Peso Faces Pressure Amid Stronger United States DollarThe peso faced additional pressure from a stronger United States dollar, with the Dollar Index (DXY), which measures the greenback against six major currencies, rising 0.58% to 107.13 points.Emerging market currencies like the peso often struggle when the dollar strengthens due to reduced risk appetite among investors.
Market analysts observed heightened trading volumes and volatility following Trumps announcement as investors sought safer assets like the dollar.Banco Base noted that negotiations between Mexico and the United States are ongoing but acknowledged that Trumps confirmation of tariffs dampened hopes for a delay.Technical analysis pointed to resistance levels near 20.54 pesos per dollar and support around 20.3620.41 pesos per dollar, suggesting limited room for recovery without positive news on trade talks or domestic economic improvements.As March 4 approaches, markets will closely watch developments in United States -Mexico negotiations.
These negotiations could have a potential impact on trade and investment flows in the region.