Mexican Peso Declines Again Amid Caution Over Trump, Remains Above 20 Per Dollar
Investor sentiment remains fragile as Trump's potential election win raises concerns over his protectionist policies.
The Mexican peso depreciated slightly on Tuesday, closing above the 20-per-dollar level for the second consecutive session as investors remain cautious ahead of the U.S. elections.
Market jitters reflect concerns over potential shifts in trade relations and tariffs if former President Donald Trump wins the election.
The exchange rate ended the day at 20.0845 pesos per dollar, compared to Monday’s close of 20.0317, according to official data from the Bank of Mexico (Banxico). This decline represents a loss of 5.28 cents, or 0.26%. During the session, the peso traded within a range, reaching a high of 20.0985 and a low of 19.9622. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against six major currencies, edged up 0.01% to 104.32 points.
Investor sentiment remains fragile as Trump’s potential election win raises concerns over his protectionist policies. His rhetoric includes threats of tariffs on Mexican imports, renegotiating the USMCA trade agreement, and labeling organized crime in Mexico as terrorism, all of which could strain bilateral relations.
On the economic front, U.S. consumer confidence climbed in October to a nine-month high, according to The Conference Board, buoyed by improved perceptions of the labor market. This positive outlook supports expectations that the Federal Reserve may slow the pace of future rate cuts. CME Group’s FedWatch tool now indicates a 99% probability of a 25-basis-point rate cut in November.
Investors are now looking ahead to third-quarter GDP data for both the U.S. and Mexico, scheduled to be released tomorrow. These figures will provide crucial insights into the economic outlook and help shape expectations for interest rate policy. In particular, Mexico’s GDP report will offer a clearer picture of the country’s growth prospects for the remainder of the year.
The peso’s performance will remain volatile as market participants monitor economic data and political developments, with the U.S. elections on November 5 playing a pivotal role in shaping sentiment around the Mexican currency.
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