Key Developments:
- The Mexican peso has appreciated against the US dollar for seven consecutive days.
- The currency gained strength due to the weakening of the US dollar and market acceptance of President Donald Trump’s fiscal and spending package.
- The US Senate approved Trump’s tax cut and spending bill, adding $3.3 trillion to the US debt.
- The Reserve Federal’s President, Jerome Powell, stated that the central bank plans to wait and observe the impact of tariffs on inflation before cutting interest rates.
- Mexican analysts predict a 7% depreciation of the peso from its current levels, ending the year at 20.13.
Mexican Peso’s Appreciation Against the Dollar
The Mexican peso gained 43 centavos against the dollar on Tuesday, marking its seventh consecutive day of gains. The local currency advanced as the US dollar weakened, with markets absorbing the approval of President Donald Trump‘s fiscal and spending package.
The exchange rate closed at 18.7307 pesos per dollar, a decrease from yesterday’s 18.7654 pesos according to official data from the Bank of Mexico (Banxico). This represents a 3.47 centavo or 0.19% appreciation for the peso.
The dollar’s price ranged from a high of 18.8252 pesos to a low of 18.6619 pesos. The Dollar Index (DXY) from the Intercontinental Exchange, which compares the US dollar to a basket of six currencies, fell 0.13% to 96.65 points.
“We expect the recovery to continue, after breaking through resistance located at 18.70,” said Grupo Financiero Banorte in a note. “The next technical support level is 18.55; resistance is at 18.80. We suggest maintaining positions.”
US Senate Approves Trump’s Fiscal and Spending Package
The US Senate approved President Trump’s tax cut and spending bill, known as the “One Big Beautiful Bill“. The $3.3 trillion addition to US debt will now return to the House of Representatives.
In this context, the peso extended its seven-day winning streak against a closing official rate of 19.1683 on June 20th, accumulating a gain of 43.76 centavos or 2.28%. The peso reached its best session level, a new minimum not seen since August 20th.
The Fed’s Cautious Stance on Interest Rates
Market operations were influenced by comments from the Reserve Federal‘s President, Jerome Powell. He reiterated that the monetary entity plans to “wait and see” the impact of tariffs on inflation before reducing interest rates.
“We’re just taking a little time,” Powell said at a meeting of central banks in Portugal, following Trump’s handwritten letter suggesting that other central banks had cut rates and urging action in the US.
Analysts Predict a 7% Peso Depreciation
In Mexico, the Bank of Mexico’s survey of private sector analysts stood out. Experts anticipate a more than 7% depreciation of the peso from its current levels, concluding the year at 20.13.
Key Questions and Answers
- Q: What has driven the Mexican peso’s recent gains against the US dollar?
- A: The Mexican peso has appreciated due to the weakening of the US dollar and market acceptance of President Donald Trump’s fiscal and spending package.
- Q: What is the impact of the US Senate approving Trump’s fiscal and spending package?
- A: The US Senate approved a $3.3 trillion addition to the US debt, which will now return to the House of Representatives.
- Q: How does the Reserve Federal view interest rate adjustments?
- A: Reserve Federal President Jerome Powell stated that the central bank plans to wait and observe the impact of tariffs on inflation before cutting interest rates.
- Q: What do Mexican analysts predict for the peso’s value?
- A: Mexican analysts predict a 7% depreciation of the peso from its current levels, ending the year at 20.13.
