The Mexican peso is declining towards 18 units due to electoral uncertainty in the U.S.

Ignacio Teson•Thursday, July 18, 2024•1 min read

The Mexican peso fell sharply on Thursday, exacerbated after former U.S. President Barack Obama reportedly joined the questioning of President Joe Biden’s re-election viability, according to The Washington Post.

The local currency depreciated due to investors’ ongoing concerns about the U.S. electoral process, where Republican candidate Donald Trump appears to be gaining an advantage.

The exchange rate ended the day at 17.9788 units. Compared to yesterday’s close of 17.7192 pesos, according to the official data from the Bank of Mexico (Banxico), this movement meant a loss of 25.96 cents, equivalent to 1.47 percent for the currency.

The dollar price fluctuated in an open range with a high of 18.0738 units and a low of 17.6979. The Dollar Index (DXY) from the Intercontinental Exchange, which measures the greenback against a basket of six currencies, rose 0.44% to 104.19 units.

USD/MXN

The peso started losing ground against the dollar early in the session, but its decline intensified after reports that Barack Obama expressed doubts about Joe Biden’s candidacy.

The 81-year-old U.S. President tested positive for Covid-19, adding to the concerns about his performance in the presidential debate. Meanwhile, his rival, Donald Trump, survived an assassination attempt over the weekend.

The Mexican peso is impacted today by the strengthening of the dollar and political volatility in the United States, along with a general risk aversion in financial markets.

The peso fell significantly due to the dollar’s strength, as investors slightly adjusted their positions in recognition of the dollar’s resilience amid the electoral environment.

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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.