Mexican Peso Drops 2%, Hits Lowest Level Since July 2022
The Mexican peso suffered a sharp decline against the U.S. dollar on Tuesday as markets reacted to new tariff threats from U.S. President-elect Donald Trump targeting Mexico and other key trade partners.
The exchange rate closed at 20.6894 pesos per dollar, compared to the previous official rate of 20.2833 pesos, according to data from the Bank of Mexico (Banxico). This represents a loss of 40.61 cents, or 2%, for the local currency.
During the session, the dollar-peso pair traded between a high of 20.8329, the highest level since July 2022, and a low of 20.4370 pesos. Meanwhile, the U.S. Dollar Index (DXY) rose 0.13% to 106.95, adding upward pressure on the greenback.
The Mexican Peso and Other Currencies
The peso’s depreciation followed Trump’s announcement of potential tariffs: 25% on imports from Mexico and Canada, citing issues such as migration and drug trafficking, and 10% on Chinese goods. These threats weighed heavily on the currencies of the affected nations.
The Canadian dollar fell 1.30% to 14.7038 against the U.S. dollar, hitting its weakest level in over four years during the session. The Chinese yuan (renminbi) also weakened slightly, while the peso, one of the most liquid emerging market currencies, saw an intraday loss of up to 2.70%.
You can check the exchange rates of major currencies, including USD/MXN, using our live rate tools.
Trump’s proposed tariffs, set to take effect on January 20, aim to pressure Mexico and Canada to take stronger measures to control migration flows into the United States. These trade threats have sparked renewed volatility in global currency markets, particularly for nations heavily reliant on trade with the U.S.
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