Mexican Peso Drops Sharply Amid Market Jitters Over Donald Trump

The Mexican peso started the week with a significant decline against the U.S. dollar, depreciating in a still-nervous market digesting the results of the U.S. election and awaiting a local monetary policy announcement.

By the end of the trading session, the exchange rate stood at 20.4042 pesos per dollar, compared to a previous close of 20.1948 pesos, according to the official data from the Bank of Mexico (Banxico). This drop of 20.94 centavos equates to a 1.03% decline. Throughout the day, the dollar traded within a range, hitting a high of 20.5786 pesos and a low of 20.1255.

The Dollar Index (DXY), which measures the greenback against six major currencies, rose by 0.50% to 105.52 points. The peso continues to experience volatility, largely due to concerns among currency traders about Donald Trump’s election win, which raises fears of potential tariffs on Mexican exports and those of other countries.

The dollar gained broadly against emerging market currencies, with the Mexican peso being one of the worst performers throughout the session.

On the local front, data released earlier in the day showed a rebound in industrial activity for September, while the consumer confidence index reached its highest level since records began in 2001.

These figures are among the last key economic indicators before Banxico’s upcoming monetary policy decision on Thursday. The central bank is widely expected to cut its interest rate, following the lead of the U.S. Federal Reserve.

Investors are also closely watching the government’s budget proposal for the coming year, where President Claudia Sheinbaum faces the challenge of reducing the fiscal deficit—a key concern for credit rating agencies.

ABOUT THE AUTHOR See More

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.

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