Mexican Peso Ends Flat After Trade Deal with U.S., Posts Loss for July

While the delay is seen as a positive development—and could help Mexico avoid a recession—the broader economic outlook remains uncertain.

Quick overview

  • The Mexican peso closed nearly unchanged against the U.S. dollar at 18.8680 pesos per dollar after a 90-day extension on U.S. tariffs was secured.
  • The peso experienced a marginal loss of 0.06% during the session, trading between a high of 18.9053 and a low of 18.7719 pesos.
  • President Claudia Sheinbaum announced the tariff delay, which is seen as a temporary relief for Mexico's economy amid uncertain conditions.
  • Despite the stable close, the peso ended July with a decline of 0.55% compared to the end of June.

The Mexican peso closed Thursday’s session virtually unchanged against the U.S. dollar, following news that Mexico secured a 90-day extension on the grace period before new U.S. tariffs take effect.

The exchange rate ended the day at 18.8680 pesos per dollar, compared to 18.8567 the previous day, according to data from the Bank of Mexico (Banxico). This represented a marginal loss of 1.13 centavos, or 0.06%.

Throughout the session, the dollar traded between a high of 18.9053 and a low of 18.7719 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, rose 0.12% to 100.08 points.

USD/MXN

Tariff Agreement Provides Temporary Relief

Just one day before the U.S. tariffs were set to take effect, Mexican President Claudia Sheinbaum announced that she had reached an agreement with President Donald Trump during a phone call to delay their implementation.

The new grace period grants Mexico an additional 90 days before a 30% tariff on its exports is applied. Trump confirmed the extension on his social platform Truth Social, though he stated that the 25% tariff on fentanyl trafficking would remain in place.

While the delay is seen as a positive development—and could help Mexico avoid a recession—the broader economic outlook remains uncertain.

Intra-Day Recovery

The peso managed to recover from earlier losses triggered by dollar strength, fueled by both the tariff news and strong U.S. economic data. At its lowest point during the session, the peso hit its weakest level in over a month.

Earlier in the day, the U.S. reported that its core inflation gauge, the Personal Consumption Expenditures (PCE) index—closely watched by the Federal Reserve—rose 2.6% year-over-year, slightly above forecasts.

On the labor front, jobless claims rose by just 1,000 last week to 218,000, indicating continued stability in the U.S. job market and low layoff rates.

Negative Month for the Peso

Despite the stable close, July ended on a sour note for the Mexican currency. Compared to its level of 18.7654 at the end of June, the peso lost 10.26 centavos over the month, a decline of 0.55%.

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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