Background on Key Figures and Relevance
The Mexican peso has shown moderate appreciation against the US dollar on this Friday morning. This improvement comes after facing early pressure from new trade threats issued by US President Donald Trump, this time targeting Apple and the European Union.
Donald Trump, the 45th President of the United States, has a significant impact on global markets due to his aggressive trade policies. His recent threats have caused market volatility, affecting not only the Mexican peso but also other international currencies and companies.
Market Developments
Spot Exchange Rate: The Mexican peso’s spot exchange rate is currently at 19.2919 units per dollar, representing a gain of 2.02 centavos or 0.11% compared to the official close of 19.3121 units on the previous day, according to data from Banco de México (Banxico).
Dollar Movement: The dollar is trading within a range, with a high of 19.3758 units and a low of 19.2517 units. Meanwhile, the Dollar Index (DXY), tracked by the Intercontinental Exchange, which compares the US dollar to six reference currencies, fell by 0.58% to 99.35 points.
Trump’s New Trade Threats
President Trump reintroduced some trade-related market nervousness with his threats to impose a 50% tariff on European Union exports as the deadline for provisional suspension of his reciprocal tariffs approaches.
- EU Tariff Threat: Trump threatened to impose a 25% tariff on Apple iPhones not manufactured in the US. He also warned of a 50% tariff on EU goods, which could take effect starting June 1.
Peso Absorbs the Decline
The Mexican peso had depreciated to a level of 19.3758 per dollar, dropping more than six centavos or 0.33%. However, it has since recovered slightly as market reactions have moderated. Additionally, the market is absorbing a trade balance surplus of 83 million dollars.
Banco Base, a local firm, commented in an analysis note: “The peso’s depreciation was due to Mexico’s close trade relationship with the United States. Mexico is highly exposed to risks posed by Donald Trump’s export policies.”
Key Questions and Answers
- Q: Who is Donald Trump and why is he relevant? A: Donald Trump is the President of the United States. His aggressive trade policies and frequent threats of tariffs have a significant impact on global markets, including the Mexican peso.
- Q: What are the recent trade threats issued by Donald Trump? A: Trump threatened to impose a 50% tariff on European Union exports and a 25% tariff on Apple iPhones not manufactured in the US. He also warned of a 50% tariff on EU goods, which could take effect starting June 1.
- Q: How has the Mexican peso reacted to these threats? A: The Mexican peso initially depreciated but has since recovered slightly. This is due to the close trade relationship between Mexico and the US, making the peso vulnerable to Trump’s export policies.
