Key Developments and Expert Analysis
In Chicago, contracts favoring the Mexican peso increased by 7,900 units in the week just ended. The Mexican peso closed the week with appreciation against the US dollar, marking its third consecutive week of gains. This upward trend is supported by the absence of retaliatory tariff announcements against Mexico or Canada and the weakening US dollar.
Market Performance
According to Banco de México (Banxico), the currency closed at 19.5223 pesos per dollar, representing a 0.30% appreciation or 99.6 centavos on Friday, its fifth consecutive session of appreciation. The peso reached its best level since October 14, 2024, when it was positioned at 19.3953 pesos per dollar.
Over the week, the Mexican peso appreciated by 2.20%, adding three weeks of advancement and its best performance since January 24, when it gained 2.36%. In the month, it has advanced by 4.58%.
The Intercontinental Exchange’s Dollar Index (DXY), which measures the US dollar against a basket of six reference currencies, only climbed 0.09% to 99.47 points during the week.
Among other currencies, the Argentine peso depreciated by 2.71%, the Swiss franc by 1.40%, the South Korean won by 1.31%, the Japanese yen by 1.10%, the Turkish lira by 1.10%, and the Russian ruble by 0.92%.
The Chilean peso appreciated by 3.31%, the Mexican peso by 2.20%, the Colombian peso by 2.14%, the Brazilian real by 2.10%, the Israeli shekel by 1.92%, and the Peruvian sol by 1.47%.
Expert Insights
Gabriela Siller, Director of Analysis at Banco Base, attributes the Mexican peso’s appreciation over the past three weeks to two primary factors:
- No retaliatory tariffs announced: On April 2, the United States did not announce “reciprocal” tariffs against Mexico or Canada. Additionally, in the past three weeks, Donald Trump has moderated his comments regarding Mexico and focused on the trade war with China.
- Weakening US dollar: The doubts surrounding the future of the US dollar as a reserve currency and the autonomy of the Federal Reserve due to Trump’s tariffs and pressure on Fed President Jerome Powell to cut interest rates have weakened the US dollar, benefiting the Mexican peso.
Experts from Monex highlighted that the Mexican peso has benefited from industrial activity growth and rumors of potential trade resolutions between the US and some countries, easing local economic pressures.
They anticipate that the peso will fluctuate between 19.47 and 19.65 pesos per dollar, considering the sideways trend of the exchange rate during the week and awaiting Mexico’s employment data.
Increased Confidence in the Peso
Mexican peso contracts in the Chicago Mercantile Exchange (CME) have increased confidence and bet on local currency appreciation against the US dollar in the past week, following three consecutive weeks of decline.
During the week ending April 25, interest in the peso rose. According to CME, net positions favoring the peso increased to 41,200 contracts from 33,300 the previous week, a rise of 7,900 contracts or approximately 23.7%.
Felipe Mendoza, market analyst for ATFX LATAM, stated that this change reflects improved risk appetite towards the Mexican peso, driven by recent currency stability and the global weakening of the US dollar.
Factors such as decreased political tensions between Donald Trump and the Federal Reserve, a more conciliatory tone in US-China negotiations, and strong Mexican economic data have reinforced the perception that the Mexican peso remains attractive compared to other emerging market currencies.
