Background on Key Figures and Context
The Mexican peso appreciated against the US dollar in Friday’s trading, supported by a more optimistic sentiment in global markets regarding trade before high-ranking US and Chinese officials met on Saturday in Geneva.
President Donald Trump suggested that an 80% tariff on Chinese products “sounds right,” marking his first specific alternative to the current 145% tariffs on Chinese goods. Meanwhile, India offered to reduce its tariff gap with the US to less than 4% from nearly 13%, in exchange for an exemption from potential US tariff hikes, as reported by Reuters.
Additionally, US President Donald Trump and UK Prime Minister Keir Starmer reached a “great trade deal,” which was the first since Trump announced strong global import tariffs that he later suspended.
Mexican Peso Performance and Market Optimism
The Mexican peso closed at 19.4669 per dollar on Friday, up from Thursday’s 19.5373, according to data from Banco de México (Banxico). This represents a 7.04-centavo, or 0.36%, appreciation.
Over the week, the peso showed a slight overall improvement despite local inflation’s rise. The data wasn’t enough to change expectations for Banxico’s announcement this week, which is anticipated to include another interest rate cut.
Compared to a close of 19.5985 units on May 2, the Mexican currency has accumulated a 13.16-centavo, or 0.67%, gain. There’s potential for further appreciation depending on the outcomes of China and US negotiations.
The Intercontinental Exchange’s Dollar Index (DXY), which compares the US dollar to a basket of six reference currencies, fell 0.29% to 100.35 points on Friday. The dollar rose 0.4% for the week, marking its third consecutive week of gains.
Market Confidence and Speculative Positions
Throughout the week, market interest in the peso remained bullish. Net speculative positions on the peso rose to 68,600 contracts from the previous week’s 59,500, an increase of 9,100 contracts or a 15.3% gain on the Chicago Mercantile Exchange’s futures market.
Felipe Mendoza, financial markets analyst at ATFX, explained that “this growth in confidence for Mexico could be driven by its relative stability compared to other emerging market currencies, attractive interest rates, and signals of macroeconomic resilience.”
Key Questions and Answers
- Q: Who are the key figures mentioned in this article? The key figures mentioned are US President Donald Trump, Chinese officials, and UK Prime Minister Keir Starmer.
- Q: What is the current state of the Mexican peso against the US dollar? The Mexican peso appreciated against the US dollar on Friday, closing at 19.4669 per dollar, up from Thursday’s 19.5373.
- Q: How have global trade sentiments influenced the Mexican peso? A more optimistic global market sentiment regarding trade supported the Mexican peso’s appreciation before high-ranking US and Chinese officials met in Genebra.
- Q: What are the recent tariff suggestions from US President Donald Trump? Trump suggested an 80% tariff on Chinese products, which is a lower alternative to the current 145% tariffs.
- Q: How have other countries’ actions affected the US dollar’s performance? India offered to reduce its tariff gap with the US, and there’s a potential trade deal between the US and UK, contributing to the dollar’s third consecutive week of gains.
