The Mexican Peso Closes Below 17.50 for the First Time in 18 Months
Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.21%.
Quick overview
- The Mexican peso strengthened against the U.S. dollar, reaching levels not seen in 18 months, closing at 17.4843 pesos per dollar.
- This appreciation was influenced by reduced market anxiety following President Trump's speech at the World Economic Forum.
- Trump's remarks included a scaled-back demand for control over Greenland and a warning about impending actions against drug cartels.
- The U.S. Treasury Secretary expressed confidence that a resolution would be found regarding Trump's Greenland ambitions, easing fears of a trade conflict.
The peso climbed to levels not seen in 18 months, supported by a calmer market backdrop following a speech by U.S. President Donald Trump in Davos.
The Mexican peso appreciated against the U.S. dollar in Wednesday’s trading, breaking below the 17.50 mark for the first time in 18 months amid reduced market anxiety after remarks by President Donald Trump at the World Economic Forum.
The exchange rate ended the session at 17.4843 pesos per dollar. Compared with Tuesday’s close of 17.6056, according to official data from the Bank of Mexico (Banxico), the move represented a gain of 12.13 centavos, or 0.69%.
During the session, the dollar traded in a range between a high of 17.6082 pesos and a low of 17.4224. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.21% to 98.77 points.
No Force Over Greenland
In a closely watched speech at the Davos forum, Trump reiterated that the United States needs to control territory in Greenland, but scaled back his demand to “just a portion” of the island. He also pledged that he would not use military force to take control of the territory.
Over the weekend, the U.S. president had warned that he would not back down from his ambitions and threatened to impose tariffs on several European countries that oppose his stance. European leaders were preparing for an emergency meeting to discuss possible responses.
U.S. Treasury Secretary Scott Bessent said on Tuesday that he was confident Washington and European governments would find a solution to Trump’s Greenland ambitions, downplaying fears of a new trade conflict.
Trump Threatens Cartel Strikes
The exchange rate, which had approached the 17.40 level earlier in the day, edged higher later on—while still holding most of its gains—after Trump issued another warning. The U.S. president said that attacks against drug cartels would “begin soon.”
Although ambiguous, Trump’s statement opened the door to interpretations of more aggressive actions in the region, potentially including direct or indirect operations on Mexican territory. Such a scenario could raise tensions ahead of the upcoming review of the USMCA trade agreement.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save