Background on the Mexican Peso and its Recent Performance
The Mexican peso concluded the week with gains against the US dollar, as trading activities concluded on this Friday. The local currency slightly advanced in a day of limited movements due to the US market’s break for Independence Day.
Daily Performance
The exchange rate ended the day at 18.6297 pesos per dollar, according to official data from Banxico (Mexico’s central bank). This represents a gain of 3.32 centavos or 0.18% compared to the previous day’s closing of 18.6629 pesos.
The dollar price fluctuated between a high of 18.6703 pesos and a low of 18.6144 pesos. The Dollar Index (DXY) from the Intercontinental Exchange, which compares the US dollar to a basket of six currencies, fell by 0.18% to 97.01.
Weekly Performance
The Mexican peso has shown strong gains over the week. With a closing official rate of 18.8529 pesos on the previous Friday, the currency improved by 22.32 centavos or 1.18%, reaching a more than ten-month low on this Friday.
Market Cautiousness and Trump’s Trade Deadline
Markets displayed minimal changes and caution on this Friday due to the US Independence Day holiday, as traders start focusing on the deadline for the implementation of US tariffs on several partners.
“Markets remain vigilant regarding the end of the reciprocal tariff pause announced on ‘Liberation Day,’ which is July 9,” said Invex Grupo Financiero. “It’s likely that President Trump will either finalize new deals or extend the pause.”
Key Questions and Answers
- Q: Who is Invex Grupo Financiero, and why is their statement relevant?
- Q: What is the significance of the ‘Liberation Day’ mentioned in Invex’s statement?
- Q: How do the recent gains in the Mexican peso relate to US trade policies?
A: Invex Grupo Financiero is a Mexican financial group that provides investment banking services, research, and brokerage. Their statement is relevant because they represent a key financial institution in Mexico, offering insights into market expectations regarding US trade policies.
A: ‘Liberation Day’ refers to July 9, when President Trump announced a pause in the implementation of new tariffs on certain US imports from Mexico. This date is crucial as traders anticipate the resumption of tariffs or potential extensions.
A: The Mexican peso’s recent gains can be attributed to reduced trade tensions between the US and Mexico, as markets react positively to the possibility of delayed or avoided tariffs. However, traders remain cautious due to the looming July 9 deadline.