Mexican Peso Slips on Stronger Dollar but Ends the Month with Strong Gains
Despite the minor drop, the peso had a strong April, buoyed by the U.S. government’s decision not to include Mexico in its tariff hikes.
Quick overview
- The Mexican peso weakened against the U.S. dollar, closing at 19.6136 pesos per dollar, a depreciation of 0.20%.
- The U.S. economy contracted by 0.3% in Q1, raising concerns of stagflation amid disappointing employment and consumer confidence data.
- Despite the recent drop, the peso had a strong April, gaining 4.14% due to the U.S. not imposing tariffs on Mexico.
- Ongoing trade tensions between China and the U.S. have positively impacted the peso's risk appetite.
Live USD/MXN Chart
The Mexican peso weakened against the U.S. dollar on Wednesday, as the greenback strengthened broadly following news that the U.S. economy contracted in the first quarter.
The exchange rate closed the day at 19.6136 pesos per dollar. Compared to Tuesday’s official closing of 19.5755 (Banxico data), this marked a depreciation of 3.81 centavos, or 0.20%. The dollar traded within a range of 19.5202 to 19.6527 pesos during the session. Meanwhile, the U.S. Dollar Index (DXY), which measures the dollar against a basket of six major currencies, rose 0.46% to 99.67 points.
U.S. Economy Contracts in Q1
According to the U.S. Department of Commerce, GDP shrank by 0.3% in Q1, reversing a 2.4% increase in the previous quarter. The decline was largely attributed to a spike in imports ahead of potential tariff hikes. The news triggered concerns of stagflation, especially after a disappointing employment survey and a sharp drop in consumer confidence, which fell to its lowest level since August 2020 (Conference Board data).
A Strong Month for the Peso
Despite the minor drop in this session, the peso had a strong April, buoyed by the U.S. government’s decision not to include Mexico in its global tariff hikes. The peso gained 84.86 centavos or 4.14% from its March close of 20.4604. Ongoing trade tensions between China and the U.S. have shifted market attention away from Mexico, boosting risk appetite for the peso.
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