Mexican Peso Starts December with Slight Drop After Trump’s Threat to BRICS
The Mexican peso lost some ground on Monday after an earlier sharp decline, as the U.S. dollar strengthened on risk-off sentiment.
The exchange rate closed at 20.3926 pesos per dollar, compared to 20.3611 pesos on Friday, according to official data from the Bank of Mexico (Banxico). This represented a moderate loss of 3.15 cents or 0.16% for the peso.
During the session, the USD/MXN traded within a range of 20.3685 to 20.6022 pesos. Meanwhile, the U.S. Dollar Index (DXY), which measures the greenback against a basket of six major currencies, rose 0.67%, reaching 106.45 points.
Macro Data
Maintaining his strategy of tariff threats, U.S. President-elect Donald Trump warned that BRICS nations must commit to not creating or supporting a new currency that challenges the dollar. Failure to comply, he said, would result in tariffs of 100%.
The dollar’s gains were further fueled by a series of strong U.S. economic data releases, suggesting that the Federal Reserve (Fed) may need to pause its recently initiated cycle of interest rate cuts.
The Mexican peso depreciated by as much as 1% to 20.60 pesos per dollar earlier in the session, marking a short-term resistance level. This decline followed two days of lower liquidity due to a U.S. holiday. Traders remain cautious as the week unfolds, with key indicators like the U.S. nonfarm payroll report and a speech by Fed Chair Jerome Powell on Wednesday expected to influence markets.
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