Mexican Peso Rises After Trump Shifts Tone on China
The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.31% to 99.29 points.
Quick overview
- The Mexican peso appreciated against the dollar after two sessions of losses, closing at 18.4691 pesos per dollar.
- The recovery was influenced by U.S. President Trump's softened rhetoric towards China, easing trade tension concerns.
- The dollar traded within a range of 18.5435 to 18.4166, while the U.S. Dollar Index rose by 0.31%.
- Traders are awaiting key U.S. economic data, with expectations that the exchange rate may fluctuate between 18.30 and 18.50.
After two consecutive sessions of losses, the Mexican peso regained ground in a calm market as the United States softened its rhetoric toward China.
The peso appreciated against the dollar in the first session of the week. After back-to-back declines, the local currency recovered in a more relaxed market environment following comments from U.S. President Donald Trump, who toned down his stance on China.
The exchange rate closed the day at 18.4691 pesos per dollar. Compared to Friday’s close of 18.5424, according to official data from the Bank of Mexico (Banxico), this represented a gain of 7.33 centavos, or 0.40%.
The dollar traded within a range between a high of 18.5435 and a low of 18.4166. The U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.31% to 99.29 points.
Mexican Peso Price-Action
After threatening China on Friday with a “massive increase” in tariffs, Trump clarified on Sunday via social media that Washington does not seek to harm Beijing, easing concerns over another escalation in trade tensions between the world’s two largest economies.
The peso staged a comeback after having briefly broken the 18.50 resistance level, reaching 18.64 per dollar as a result of Trump’s earlier comments. As the president moderated his tone, the exchange rate moved back below 18.50.
On the other hand, traders are waiting for the release of key U.S. economic data this week, which remain uncertain due to the federal government shutdown. The main reports in focus are inflation figures and labor market data that have been delayed for two weeks.
Today was a U.S. holiday (Columbus Day), which resulted in a slow trading session. For the rest of the week, the exchange rate could return to the 18.30–18.50 range. Traders will be closely watching shutdown negotiations in the United States.
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